American companies put 188,000 people to work last month, well above the 150,000 new jobs expected and the strongest gain since February, according to a report issued Wednesday by ADP Research Institute, in collaboration with Moody's Analytics.
Analysts polled by Briefing.com had expected, on average, 150,000 new jobs. From April to May, private-sector employment increased by 135,000, on a seasonally adjusted basis. The estimated gain from March to April was revised downwardly to 113,000.
The monthly ADP report is closely watched for signs about what the Labor Department's monthly nonfarm payroll report will disclose.
"The 188,000 increase in the ADP measure of U.S. private payroll employment in June is encouraging but doesn’t mean the official payrolls data ... will be just as good," said Paul Dales, senior U.S. economist with Capital Economics. "We are sticking to our forecast that official payrolls rose by around 150,000 last month. That said, this upbeat survey does settle our nerves a bit after the further fall in the employment index of the ISM manufacturing survey."
Goods-producing employment rose by 27,000 jobs in June, its largest increase in four months. Construction payrolls rose by 21,000 in June, their biggest gain since January, while manufacturers added 1,000 jobs following a two-month decline.
The service-providing sector added 161,000 jobs in June, its largest increase since February and greater than the sector’s average gain of 146,000 through the first five months of the year.
Among the service industries reported by the ADP National Employment Report, trade, transportation and utilities added the most jobs, with 43,000 over the month – its strongest increase since the start of 2013. Professional and business services grew by 40,000 jobs, and financial activities added 13,000 jobs, nearly double the average monthly pace through the first five months of the year.
"During the month of June, the U.S. private sector added 188,000 jobs, driven by gains across all sizes of businesses, and with small companies showing the largest overall monthly increase," said Carlos A. Rodriguez, president and chief executive officer of ADP. "Most notably, the goods-producing sector added 27,000 jobs in June, a marked improvement over the decline the previous month."