U.S. companies in June added more jobs than expected, ADP data show

U.S. companies added more jobs in June than expected, indicating further progress in the nation’s labor market recovery.

The 692,000 gain in private payrolls followed a downwardly revised 886,000 increase in May, according to ADP Research Institute data released Wednesday, June 30. The median projection in a Bloomberg survey of economists called for a 600,000 gain this month.

The advance in hiring suggests robust demand, diminishing economic uncertainty and a return to many pre-pandemic activities continue to drive additional employment gains, especially within the leisure and hospitality sector. The data also indicate businesses are having some success filling a multitude of open positions.

Amid a ramp-up in demand, many employers have rushed to increase headcount. Job openings stand at a record high, and a separate report out Tuesday from the Conference Board showed the share of respondents reporting that jobs are “plentiful” rose to the highest since 2000.

Service-provider employment increased 624,000 in June, with more than half the gain stemming from a 332,000 advance in leisure and hospitality, according to ADP. Payrolls in the health care industry posted another month of solid gains, climbing 93,000 after May’s 106,000 increase.

Payrolls at goods producers rose 68,000 during the month, driven largely by construction.

“Service providers, the hardest hit sector, continue to do the heavy lifting, with leisure and hospitality posting the strongest gain as businesses begin to reopen to full capacity across the country,” said Nela Richardson, ADP’s chief economist, in a statement.

The figures come just before the government’s monthly jobs report on Friday, which is forecast to show private payrolls increased by 610,000, an acceleration from a weaker-than-expected May report. The unemployment rate is expected to fall to 5.6% as participation inches higher.

The increase in June payrolls was spread about evenly across firm sizes. Companies with 500 or more workers saw payrolls rise 240,000 while small businesses added 215,000.

ADP’s payroll data represent firms employing nearly 26 million workers in the U.S.