U.S. Private Sector Employment Surges By 497,000 Jobs In June, Much More Than Expected

A report released by payroll processor ADP on Thursday showed private sector employment in the U.S. surged by much more than expected in the month of June.

ADP said private sector employment spiked by 497,000 jobs in June after jumping by a downwardly revised 267,000 jobs in May.

Economists had expected private sector employment to increase by 228,000 jobs compared to the addition of 278,000 jobs originally reported for the previous month.

“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” said ADP chief economist Nela Richardson. “But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”

The much stronger than expected private sector job growth partly reflected a jump in employment in the leisure and hospitality sector, which shot up by 232,000 jobs.

Employment in the construction, trade and transportation and education and health services sectors also saw notable growth, while employment in the manufacturing and information sectors decreased.

While the report also showed employment at small establishments soared by 299,000 jobs and employment at medium establishments jumped by 183,000 jobs, employment at large establishments edged down by 8,000 jobs.

ADP also said job stayers saw a year-over-year pay increase of 6.4 percent in June, down from 6.6 percent in May.

Pay gains for job changers slowed for the 12th straight month, to 11.2 percent, the slowest pace of growth since October 2021.

On Friday, the Labor Department is scheduled to release its more closely watched monthly employment report for June.

Economists currently expect employment to jump by 225,000 jobs in June after surging by 339,000 jobs in May, while the unemployment rate is expected to edge down to 3.6 percent from 3.7 percent.

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