ADP Employment Increase Remains Modest in June; Pay Growth Moderates
by:Tom Moeller
|in:Economy in Brief
Summary
- Gain in jobs is weakest in five months; factory jobs decline.
- Service-sector & construction job growth slows; leisure hiring picks up.
- Wage growth for “job stayers” eases y/y.
The ADP National Employment Report indicated that nonfarm private sector payrolls rose 150,000 (1.5% y/y) during June following a 157,000 May increase, revised from 152,000. April’s rise of 188,000 was unrevised. It was the weakest increase since January but higher than the 104,000 low in November of last year. A 165,000 rise in ADP employment had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" eased to 4.9% y/y in June from 5.0% in May, the weakest growth since July 2021 and well below a September 2022 high of 7.8% y/y. Pay increases in manufacturing averaged 4.7% y/y while leisure & hospitality rose a diminished 5.2% y/y. Professional & business services pay grew 4.8% y/y while construction sector earnings rose 5.3% y/y. Pay increases for “job changers” averaged 7.7% y/y last month, up from a 7.3% y/y low in January, but remained well below the 16.4% y/y peak in June 2022.
Small business hiring (less than 50 employees) rose 5,000 (0.5% y/y) last month after falling 19,000 in May. Employment at medium-sized firms (50-499,000 employees) rose 88,000 (2.0% y/y) after an 82,000 May increase. These gains stood below the March high of 113,000. Large business hiring (500+ employees) rose 58,000 (2.6% y/y) during June following a 94,000 May gain. It was the weakest increase since January.
Goods-producing employment rose 14,000 last month (0.8% y/y) after a 5,000 May rise. The number of construction sector jobs rose 27,000 (3.0% y/y) following a 34,000 May increase. Hiring in the manufacturing sector fell 5,000 (-0.1% y/y) last month after a 20,000 May shortfall. Natural resource & mining hiring declined 8,000 (-2.2% y/y) after a 9,000 drop.
The number of service-producing jobs rose 136,000 (1.6% y/y) in June following a 152,000 May gain. Leisure & hospitality employment rose 63,000 (2.5% y/y) after improving 12,000 and education jobs gained 9,000 (2.5% y/y) following a 50,000 increase. The number of jobs in trade, transportation & utilities increased 15,000 in June (0.8% y/y) following a 57,000 May gain. Professional & business services employment rose 25,000 (0.6% y/y) after falling 5,000 while information employment fell 3,000 (+0.1% y/y), the third consecutive monthly decline.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
The Minutes to the latest FOMC meeting can be found here.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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