The U.S. economy added nearly 700,000 new private sector jobs last month, but a downward revision to the April tally indicates uneven improvement in the labor market even as the economic recovery continues to outpace forecasts heading into the second half of the year.
Payroll processing group ADP said in its National Employment Report, which it compiles with Moody's Analytics, that private sector jobs grew by 692,000 last month, well ahead of the Street consensus forecast of a 600,000 total and the strongest monthly figure since September. The final reading for April was revised lower by 92,000 positions to 886,000.
The Bureau of Labor Statistics will publish its official nonfarm payroll report Friday, with economists looking for a headline total that represents around 675,000 new jobs, following on from May's modestly disappointing 559,000 tally.
“The labor market recovery remains robust, with June closing out a strong second quarter of jobs growth,” said Nela Richardson, chief economist, ADP. “While payrolls are still nearly 7 million short of pre-COVID19 levels, job gains have totaled about 3 million since the beginning of 2021."
"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," she added.
U.S. equity futures were modestly firmer following the data release, with contracts tied to the Dow Jones Industrial Average indicating an opening bell gain of 7 points and those linked to the S&P 500 priced for a 1 point bump from last night's record close.
Benchmark 10-year Treasury bond yields, meanwhile, ticked lower, to 1.451%, while the dollar index gained 0.1% against a basket of its global peers to trade at 92.12.