Private employers in the U.S. was found to have added fewer jobs than expected in June. Still, overall job growth remained relatively strong thanks to a recovery in hiring in the leisure and hospitality industry, according to a report from payroll processor ADP on Wednesday.
The ADP Jobs report showed that private sector payrolls rose by 150,000 last month, down from an upwardly revised number of 157,000 in May. Economists had expected the figure at 163,000.
The leisure and hospitality industry accounts for the majority of jobs created in the primary service sector, offsetting declines in the information sector and weaknesses in education and health services.
"Job growth is still strong, but not as widespread," said Nela Richardson, ADP's Chief Economist. "If it wasn't for the recovery in employment in the leisure and hospitality industry, June would have been a bleak month."
Meanwhile, the year-on-year pay increase for those who remained in their current position was 4.9%, the slowest growth rate since August 2021. The pay increase for those who changed jobs also declined to 7.7%.
Investors are examining several jobs market data this week, including the government's nonfarm payrolls report on Friday. Signs of a slowdown in labor demand could theoretically help relieve some inflationary pressures, potentially giving the Federal Reserve more justification to cut interest rates from their highest level in more than two decades later this year.
