U.S. June ADP Employment - Slightly slower, far from weak
June’s ADP’s estimate of private sector employment of 98k is on the weak side of expectations and similarly below consensus forecasts for private sector payrolls tomorrow. It is possible that payrolls could outperform ADP data if payrolls capture more temporary jobs created by the World Cup. Our payroll forecast is 115k, with 125k in the private sector.
The June ADP report shows growth led by a 54k rise in education and health, the sector which has led most recent payroll gains (largely from health). Also firm were trade, transport and utilities at 15k and more surprisingly financial (which has been trending negatively in payrolls data) at 14k.
Manufacturing at 5k and construction at 2k both saw modest gains. Leisure and hospitality, which was strong in the May payroll breakdown, probably on World Cup hiring, rose by only 2k, and it is possible that payrolls will outperform in this sector in June.
A 98k rise in the ADP report, while slightly slower than in April and May, is far from weak, implying no gain in unemployment, and stronger than each month in Q1 and all months in 2025 bar January. The slowing is consistent with gains in initial and continued claims over the survey period.
Wages saw yr/yr gains for job stayers stable at 4.4% while job changers saw a modest pick up to 6.6% from 6.5%, reversing a May slowing.
