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Private sector adds surprisingly strong 281,000 jobs in June, ADP says

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June's private-sector job growth was the best since November 2012, ADP said
The biggest increase in construction hiring in more than eight years boosted private-sector job growth.

Private employers added a surprisingly strong 281,000 net new jobs in June, the most since late 2012, payroll firm Automatic Data Processing Inc. said Wednesday.

The figure was up sharply from 179,000 in May and is a positive sign heading into Thursday's official jobs report from the Labor Department. 

Analysts had expected the closely watched ADP report to show that private-sector job growth improved in June, but had anticipated an increase of just 213,000.

The June figure was the best since ADP reported 293,000 net new private-sector jobs in November 2012.

"The job market is steadily improving," said Mark Zandi, chief economist of Moody’s Analytics, which assists ADP in preparing the report.

The construction industry showed very strong growth, adding 36,000 net new jobs in June, the most in more than eight years, ADP said. The figure was up from 17,000 in May.

Manufacturers added 12,000 jobs, compared with 11,000 the previous month.

And the financial services sector, which has been weak, increased hiring by 11,000 net new jobs in June, up from 5,000 in May and the best since November 2012, ADP said.

"Job gains are broad-based across all industries and company sizes," he said. "Judging from the job market, the economic recovery remains fully intact and is gaining momentum.”

Economists project that the government will report on Thursday that the economy -- private and public sector -- added about 211,000 net new jobs in June, down from 217,000 the previous month.

The unemployment rate is forecast to hold at 6.3%, its lowest level since September 2008.

Based on the latest ADP report, Zandi forecast that the Labor Department would report the economy added 280,000 net new jobs in June. However, ADP undershot the Labor Department figure last month.

Zandi said monthly figures can vary. Underlying job growth is about 225,000 a month, which is "really good by any historical standard," he said.

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Copyright © 2014, Los Angeles Times

UPDATE

July 2, 6:28 a.m.: This post has been updated with additional data and analysis.

This article originally posted at 5:43 a.m.

 

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