The ADP has just released its latest monthly payroll report and the results were surprisingly strong. 281,000 private jobs were created in June—the most in nearly two years. This surpassed economists’ projections of 200,000 net payroll jobs and is considerably higher than the 179,000 jobs created in May.
Interestingly enough, small companies (with 50 employees or fewer) accounted for the lion’s share of the new jobs, adding 117,000 positions. Mid-sized businesses also pulled their weight with 115,000 new jobs, the largest monthly gain in seven years. Meanwhile, large firms (with more than 500 employees) added 49,000 positions to their payrolls. The hottest industries in terms of new hiring are professional and business services (77,000), construction (36,000), manufacturing (12,000) and finance (11,000).
The ADP payroll report is closely watched by economists as a measure of hiring in the private sector but tomorrow’s Labor Department employment report will likely be even more of a market mover. This report covers both private and public payrolls and also measures the national Unemployment Rate and average workweek. For this report, economists are expecting 200,000 new jobs the unemployment rate to remain at 6.3% for the month of June.
Tomorrow will also bring the latest jobless claims report; currently economists expect the measure of layoff activity to rise slightly from 312,000 to 315,000. As I mentioned in last Friday’s blog post, jobless claims have been trending below 350,000 (the benchmark for job creation) for the past year so this has been a bright spot for the economy.
All-in-all, it appears that the labor market recovery is gaining momentum, especially with smaller businesses. So while tomorrow will be the moment of truth for the state of the jobs market, we should all be encouraged by the secondary reports released today. I’ll have the full details on the new unemployment rate as soon as the numbers are released, so be sure to keep your eyes peeled for my next blog post.