Phoenix, Arizona – Construction is in full swing in states such as Arizona, California, Florida, and Texas, showcasing a bustling economy and job market.
According to the latest ADP National Employment Report released on Wednesday morning, U.S. companies hired 150,000 workers in June. Although this number fell short of the 160,000 expected by economists, it is a slight decrease from the revised 157,000 added in May. The report also revealed a drop in wage growth to 4.9%, the slowest pace since August 2021. For job switchers, wages increased by 7.7%, slightly down from May’s 7.8% rise.
The majority of job growth was seen in the services sector, with minimal contributions from goods producers. Hospitality and leisure industries saw the most significant gains, adding 63,000 new positions. Other sectors like construction and professional services followed with 27,000 and 25,000 new jobs, respectively.
However, there were notable declines in certain sectors last month, with natural resources, mining, and manufacturing shedding jobs. ADP chief economist Nela Richardson noted that job growth is solid but not evenly distributed, emphasizing the importance of hiring in leisure and hospitality for maintaining overall growth.
The weaker-than-expected report coincides with the Federal Reserve’s recent tightening efforts, raising interest rates to their highest level since 2001. Wall Street is closely monitoring the labor market for signs of cooling, indicating a potential shift to interest rate cuts. While central bank officials have hinted at rate reductions later this year, they stress the need for clear evidence of inflation nearing the 2% target.
Looking ahead, the Labor Department is set to release the more anticipated June jobs report, expected to show an increase of 190,000 workers. This follows a gain of 272,000 jobs in May, with a projected stable unemployment rate of 4%.
Despite the discrepancies between ADP’s figures and the official government data, the report provides insights into the evolving labor market landscape, hinting at potential trends and impacts on the broader economy.