Private sector added 150,000 jobs in June, with annual wages rising 4.9%, ADP says

The labor market continued to expand in June, but wage growth slowed, payroll giant ADP says reported Wednesday. Private-sector employers added 150,000 jobs, while annual wages rose 4.9% year over year.

The services sector added 136,000 jobs, including 25,000 in professional and business services, such as accounting and tax preparation. The financial services sector, which includes banking, added 11,000 jobs. Most of the gains in the services sector came from the entertainment and hospitality industry, which gained 63,000 jobs.

“Overall, services companies continue to give us good numbers, but those numbers are pretty concentrated,” ADP Chief Economist Nela Richardson said on a conference call with reporters on Wednesday.

Patrick T. Fallon/Bloomberg

The goods sector saw relatively few job gains in June (14,000), mostly in construction, which gained 27,000 jobs. These losses were offset by the loss of 5,000 jobs in manufacturing and 8,000 in the natural resources and mining sectors.

“There is some reason to be concerned that recruitment will not be as broad as we would like in the second half of the year,” Richardson said.

Small businesses created 5,000 jobs, with a gain of 13,000 jobs in firms with 1 to 19 employees offset by a loss of 8,000 jobs in firms with 20 to 49 employees.

Midsize businesses added 88,000 jobs in June, including 65,000 in firms with 50 to 249 employees and 23,000 in organizations with 250 to 499 employees. Large businesses with 500 or more employees added 58,000 that month.

In June, year-on-year wage growth for those who stayed in their jobs was 4.9%, but that was the slowest pace of growth since August 2021. Wage growth for job changers also slowed to 7.7%. The rate of growth in professional and business services wages for those who stayed in work was 4.8%.

“When you look at payroll growth by firm size, it’s pretty consistent across the board, with bigger increases for midsize and large firms than for small firms,” Richardson said. “Overall, a very good jobs report, not great, consistent with the cooling we were expecting, but a very concentrated mix of jobs. That could underscore some coming, ongoing weakness over the next six months.”