After jumping heroically in May, ADP reported a disappointing 158k employment gain in June (188k exp.) and revised May’s exuberance notably lower (253k to 230k). While ‘soft’ survey data suggests employment should be re-surging, the hard numbers are disappointing again…
Medium-sized firms dominated the gains (+91k vs Small firms 17k and Large firms +50k).
Perhaps most notable for President Trump is that all 158k of the gains came in the Service-Producing sector of the economy – Goods-Producing Sector gained zero jobs.
“Despite a slight moderation in the month of June, the labor market remains strong,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. “For the month of June, jobs were primarily created in the service-providing sector.”
Mark Zandi, chief economist of Moody’s Analytics, said, “The job market continues to power forward. Abstracting from the monthly ups and downs, job growth remains a stalwart between 150,000 and 200,000. At this pace, which is double the rate of labor force growth, the tight labor market will continue getting tighter.”
The drop in context:
Change in Nonfarm Private Employment
Change in Total Nonfarm Private Employment
Change in Total Nonfarm Private Employment by Company Size