Construction is booming in states such as Arizona, California, Florida and Texas.
U.S. companies started hiring more slowly than expected in June, according to the ADP national employment report released Wednesday morning, signaling that the labor market continues to cool on the back of rising interest rates.
The company will create 150,000 jobs Last month’s payrolls fell short of the 160,000 increase expected by economists surveyed by Refinitiv and were down from a revised May figure of 157,000.
At the same time, the report showed that wage growth, the main driver of inflation, slowed slightly to 4.9%, the slowest rate of growth since August 2021. Wages for workers who changed jobs rose 7.7%, down from a 7.8% increase in May.
White-collar workers struggling to find work as labor market slows
Employment growth was almost entirely in the services sector, with goods producers adding just 3,000 jobs in total. (Paul Barsebach/Media News Group/Orange County Register/via Getty Images)
Employment growth was almost entirely in the services sector, with goods producers adding just 14,000 jobs in total.
Most of the job growth was in the hospitality and leisure industry, which added 63,000 new jobs. Job gains outside of this sector were generally weak. Construction added 27,000 jobs in June, while professional and business services added 25,000.
The number of high-paying jobs is declining
Some sectors saw notable declines last month: natural resources and mining lost 8,000 jobs, and manufacturing lost 5,000 jobs.
“Job gains have been solid but not broad-based,” said Nella Richardson, chief economist at ADP. “June would have been a weak month were it not for the leisure and hospitality employment recovery.”
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The weaker-than-expected report Federal Reserveraised interest rates to their highest level since 2001. Wall Street is watching closely for signs that the labor market might finally cool off and allow the Fed to reverse course and cut rates.
Central bank officials have signaled they will start cutting rates later this year but have warned they need more evidence that inflation is moving back towards their 2% target.
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The data comes ahead of the Labor Department’s highly-anticipated June jobs report on Friday morning, which is expected to show employers added 190,000 workers, an increase of 150,000 from a year ago. 272,000 in MayThe unemployment rate is expected to stabilize at 4%.
ADP figures can differ significantly from official government statistics and have historically been unreliable as a predictor of the future.
