By Kathleen Madigan
U.S. businesses went on a hiring spree in June, according to a
survey of hiring released Wednesday. The higher-than-expected gain
could raise expectations for the government's payrolls report due
on Thursday.
Private-sector payrolls in the U.S. increased by 281,000 new
jobs in June, according to the national employment report compiled
by payroll processor Automatic Data Processing Inc. (ADP) and
forecasting firm Moody's Analytics.
Economists surveyed by the Wall Street Journal expected ADP to
report a June advance of just 210,000. The May ADP employment
increase was unrevised at 179,000.
The ADP estimate is issued ahead of the Bureau of Labor
Statistics' employment situation report scheduled for Thursday.
Economists expect nonfarm payrolls to increase 215,000 in June,
close to the 217,000 added in May.
The June unemployment rate is expected to hold at 6.3%.
Wednesday's ADP number adds an upside risk to the June nonfarm
payrolls estimates. Forecasters look at ADP as a guide for
payrolls, but the private-sector report has a history of large
misses when it comes to anticipating the BLS's number.
According to ADP, firms employing between 1-49 workers added
117,000 new workers last month. Medium-sized businesses with
payrolls of 50-499 workers increased payrolls by 115,000 employees.
Large firms, businesses with 500 or more employees, hired 49,000
more workers.
Service-sector payrolls increased by 230,000 workers last month.
The factory sector added 12,000 positions. Construction payrolls
increased by 36,000 slots.
Another report that focuses on small firms did not meet
expectations for June. The Intuit small business index shows small
firms employing fewer than 20 employees increased payrolls by
20,000 jobs last month, a little slower than 25,000 estimated to
have been added in May.
ADP, of Roseland, N.J., offers payroll processing, human
resource and benefit administration services to about 620,000
clients worldwide. Economics firm Moody's Analytics is a subsidiary
of Moody's Corporation.
--Write to Kathleen Madigan at kathleen.madigan@wsj.com