Private sector employment in the U.S. increased by much more than anticipated in the month of June, according to a report released by payroll processor ADP on Wednesday.
ADP said employment in the private sector surged up by 281,000 jobs in June following an increase of 179,000 jobs in May. Economists had been expecting employment to climb by about 205,000 jobs.
The substantial private sector job growth in June reflected the biggest monthly increase in employment since November of 2012.
"The job market is steadily improving," said Mark Zandi, chief economist of Moody's Analytics. "Job gains are broad based across all industries and company sizes."
He added, "Judging from the job market, the economic recovery remains fully intact and is gaining momentum."
The stronger than expected private sector job growth was partly due to a jump in employment in the service sector, which added 230,000 jobs in June following an increase of 148,000 jobs in May.
The professional/business services industry added 77,000 jobs, while employment in the trade/transportation/utilities industry grew by 50,000 jobs.
Additionally, the report said employment in the goods-producing sector increased by 51,000 jobs in June after rising by 31,000 jobs in May.
ADP said the construction industry added 36,000 jobs in June, more than double the May number. The manufacturing industry added 12,000 jobs.
The ADP report may generate some optimism about the Labor Department's monthly jobs report, which is due to be released on Thursday.
The Labor Department report includes both public and private sector jobs and is currently expected to show an increase of about 210,000 jobs.
Paul Dales, Senior U.S. Economist at Capital Economics, said, "Overall, an increase in official payrolls by at least 200,000 in June would probably be enough to reduce the unemployment rate to 6.2%, from 6.3% in May."
"Given the recent volatility of the GDP data, the strength of the labor market will play a greater role in the Fed's thinking," he added.
by RTT Staff Writer
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