WASHINGTON - Companies in the U.S. added more workers than forecast in June, which may ease concern the labor market is deteriorating, a private payrolls report showed.
The 176,000 increase followed a revised 136,000 gain the prior month that was higher than initially estimated, according to figures released today by Roseland, New Jersey-based ADP Employer Services. The median forecast of economists surveyed by Bloomberg News called for a 100,000 advance.
A pickup in hiring that’s sustained will help generate the wage growth needed to spur consumer spending, which accounts for about 70 percent of the world’s largest economy. A Labor Department report due tomorrow may show that private payrolls accelerated in June from a month earlier, while the unemployment rate held at 8.2 percent, economists projected.
A strong number “is consistent with an economy growing at potential,” said Neil Dutta, head of U.S. economics at Renaissance Macro Research LLC in New York. “Given the fragility in the stock market right now with investors on edge, any upside surprise will be rewarded.”
Estimates of the 35 economists surveyed by Bloomberg ranged from gains of 50,000 to 150,000 in the ADP report. ADP’s initial figures for May showed a gain of 133,000, while the Labor Department said companies added 82,000 workers that month.
Over the previous six reports, ADP’s initial figure was closest to the Labor Department’s first estimate of private payrolls in April, when it understated the increase in jobs by 11,000. The estimate was least accurate in December, when it overstated the employment gain by 113,000.
Goods-producing industries, which include manufacturers and builders, added 16,000 workers in June, today’s ADP figures showed. Employment in construction increased by 8,000, while factories added 4,000 jobs.
Service providers increased employment by 160,000 workers.
Companies employing more than 499 workers took on 11,000 workers. Medium-sized businesses, with 50 to 499 employees, added 72,000 and small companies increased payrolls by 93,000, ADP said.
A Labor Department report due tomorrow may show that private payrolls rose by 100,000 in June and unemployment stayed at 8.2 percent, economists projected.
The ADP report is based on data from businesses with a total of more than 21 million workers on payrolls. Macroeconomic Advisers LLC in St. Louis produces the data with ADP.
Estate and Corporate Income Taxes are changing next year, and business owners and executives should know the details. The PBN Summit on November 6th will provide those details and more - including how much Obamacare's Employer Mandate could cost.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.