US Private Employment Increased by 150,000 in June... Three Consecutive Months of Decline

Employment Cooling Signal Below Expert Expectations
Wage Growth Rate 4.9%... Lowest Since August 2021
Labor Ministry Employment Report on the 5th in Focus

Last month, the increase in private employment in the United States was reported to have declined for the third consecutive month. This is interpreted as a sign that the U.S. labor market is cooling down.

According to the U.S. employment report released by ADP, a private labor market research firm, on the 3rd (local time), private sector new job creation in June increased by 150,000, falling short of the market expectation of 163,000.

The increase was also smaller compared to May, when private new employment rose by 157,000.

By sector, the leisure and hospitality sector saw the largest increase with 63,000 jobs added. This was followed by construction with 27,000, professional and business services with 25,000, other services with 16,000, trade, transportation, and utilities with 15,000, and financial activities with 11,000 jobs added. On the other hand, natural resources and mining decreased by 8,000 jobs, while manufacturing and information sectors declined by 5,000 and 3,000 jobs respectively.

The pace of wage growth has slowed. Wages for workers who have been in the same job for the past 12 months rose by 4.9% year-over-year, marking the lowest level since August 2021. The wage growth rate for job changers also slowed to 7.7%.

Nela Richardson, ADP’s Chief Economist, analyzed, "Job growth was solid but not broad-based. If it weren’t for the employment rebound in the leisure and hospitality sector, June would have been a sluggish month."

The ADP report was released ahead of the U.S. Department of Labor’s June employment report scheduled for release on the 5th. A more accurate picture of the U.S. labor market will be revealed in the Labor Department’s employment report. Experts expect that nonfarm payrolls increased by 189,000 last month, significantly slowing from the previous month’s 272,000. The unemployment rate is expected to remain steady at 4%.