ADP National Employment Report: Private Sector Employment Increased by 150,000 Jobs in June; Annual Pay was Up 4.9%
The June ADP National Employment Report reveals an increase of 150,000 private sector jobs and a 4.9% rise in annual pay. This report, created by ADP Research Institute in collaboration with Stanford Digital Economy Lab, uses anonymized payroll data from over 25 million U.S. employees to provide a detailed and real-time view of the labor market. Job gains were notable in leisure and hospitality, which contributed 63,000 jobs. However, the growth wasn't broad-based, with sectors like manufacturing and natural resources experiencing declines. Pay gains for job-stayers and job-changers slowed to 4.9% and 7.7% respectively, the slowest since August 2021. Regional analysis showed the South leading with 80,000 new jobs. The report also highlighted job creation by establishment size, with medium-sized establishments adding 88,000 jobs. The May job addition was revised upwards to 157,000.
- Private sector added 150,000 jobs in June.
- Annual pay increased by 4.9% year-over-year.
- Leisure and hospitality sectors added 63,000 jobs.
- Medium establishments (50-249 employees) added 65,000 jobs.
- Revised May job additions to 157,000.
- Job creation slowed for the third consecutive month.
- Goods-producing sectors saw a mixed performance with declines in natural resources (-8,000) and manufacturing (-5,000).
- Pay gains for job-changers slowed to 7.7%, the slowest pace since August 2021.
ADP's report indicates that private sector employment increased by 150,000 jobs in June, which is a strong indicator of economic activity. However, the slowing job creation trend for the third consecutive month suggests potential underlying economic challenges. For retail investors, this could mean a cautious outlook in the short term as the labor market shows signs of cooling.
Employment growth was not uniform across sectors. Notably, the leisure and hospitality sector added 63,000 jobs, a substantial share of the total, indicating a robust recovery in consumer spending and travel. In contrast, sectors like natural resources/mining and manufacturing saw job losses, reflecting possibly sector-specific issues or broader economic trends such as energy price fluctuations or trade impacts.
When it comes to pay, the report shows a year-over-year pay increase of 4.9% for job-stayers, marking the slowest pace since August 2021. This deceleration in wage growth might ease some inflationary pressures, but it also reflects softer bargaining power for workers. For investors, slowing wage growth could mean reduced consumer spending power, impacting companies reliant on consumer sales.
In summary, while the report shows continued job growth, the deceleration in both employment and wage growth suggests moderation in economic expansion. Investors should monitor sector-specific developments and regional variances to make informed decisions.
The ADP National Employment Report provides invaluable insights into the U.S. labor market, particularly coming from its large dataset of over 25 million employees. The data shows that medium-sized establishments (50-249 employees) contributed the most to job growth with 65,000 new jobs. This suggests that mid-sized companies are currently experiencing better growth dynamics compared to smaller or even larger firms and could be an area for potential investment consideration.
Regional job growth disparities are also noteworthy. The Southern U.S. led in job creation with 80,000 new jobs, largely driven by states in the South Atlantic and West South Central regions. This regional boom could be attributed to lower taxes, business-friendly policies and ongoing population migration from other parts of the country. Investors might want to pay attention to companies with significant operations in these regions.
On the other hand, the pay trend data showing 7.7% year-over-year pay growth for job-changers compared to 4.9% for job-stayers indicates that labor mobility is currently a lucrative strategy for workers. Companies might face higher turnover costs and need to offer competitive pay packages to retain talent, which could impact profitability in the short term.
Overall, the report highlights a mixed but mostly positive labor market. While job growth is slowing, certain regions and sectors demonstrate resilience. Investors should consider these nuances and trends when evaluating their portfolios.
The jobs report and pay insights use ADP's fine-grained anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month's total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of
"Job growth has been solid, but not broad-based," said Nela Richardson, chief economist, ADP. "Had it not been for a rebound in hiring in leisure and hospitality, June would have been a downbeat month."
June 2024 Report Highlights*
View the ADP National Employment Report and interactive charts at www.adpemploymentreport.com.
JOBS REPORT
Private employers added 150,000 jobs in June
Job creation among private employers slowed for the third straight month.
Change in
Change by Industry Sector
- Goods-producing: 14,000
- Natural resources/mining -8,000
- Construction 27,000
- Manufacturing -5,000
- Service-providing: 136,000
- Trade/transportation/utilities 15,000
- Information -3,000
- Financial activities 11,000
- Professional/business services 25,000
- Education/health services 9,000
- Leisure/hospitality 63,000
- Other services 16,000
Change by U.S. Regions
- Northeast: 31,000
- New England 7,000
- Middle Atlantic 24,000
- Midwest: 26,000
- East North Central 14,000
- West North Central 12,000
- South: 80,000
- South Atlantic 47,000
- East South Central -7,000
- West South Central 40,000
- West: 4,000
- Mountain 1,000
- Pacific 3,000
Change by Establishment Size
- Small establishments: 5,000
- 1-19 employees 13,000
- 20-49 employees -8,000
- Medium establishments: 88,000
- 50-249 employees 65,000
- 250-499 employees 23,000
- Large establishments: 58,000
- 500+ employees 58,000
PAY INSIGHTS
Pay gains for job-stayers slowed in June
Year-over-year pay gains for job-stayers were 4.9 percent in June, the slowest pace of growth since August 2021. Pay gains for job-changers also slowed, to 7.7 percent.
Median Change in Annual Pay (ADP matched person sample)
- Job-Stayers
- Job-Changers 7.
Median Change in Annual Pay for Job-Stayers by Industry Sector
- Goods-producing:
- Natural resources/mining
4.2% - Construction
5.3% - Manufacturing
4.7%
- Service-providing:
- Trade/transportation/utilities
4.6% - Information
4.5% - Financial activities
5.0% - Professional/business services
4.8% - Education/health services
5.3% - Leisure/hospitality
5.2% - Other services
5.2%
Median Change in Annual Pay for Job-Stayers by Firm Size
- Small firms:
- 1-19 employees
4.1% - 20-49 employees
4.8%
- Medium firms:
- 50-249 employees
5.1% - 250-499 employees
4.9%
- Large firms:
- 500+ employees
4.9%
To see Pay Insights by
* Sum of components may not equal total, due to rounding.
The May total of jobs added was revised from 152,000 to 157,000. The historical data file, and weekly data for the previous month, is available at https://adpemploymentreport.com/.
To subscribe to monthly email alerts or obtain additional information about the ADP National Employment Report, including employment and pay data, interactive charts, methodology, and a calendar of release dates, please visit https://adpemploymentreport.com/.
The July 2024 ADP National Employment Report will be released at 8:15 a.m. ET on July 31, 2024.
About the ADP® National Employment Report™ The ADP National Employment Report is an independent measure of the change in
The ADP National Employment Report is broadly distributed to the public each month, free of charge, as part of the company's commitment to offering deeper insights of the
About the ADP Research Institute®
The ADP Research Institute delivers data-driven discoveries about the world of work and derives reliable economic indicators from these insights. We offer these findings as a unique contribution to making the world of work better and more productive by delivering actionable insights to the economy at large.
About ADP (NASDAQ – ADP)
Designing better ways to work through cutting-edge products, premium services and exceptional experiences that enable people to reach their full potential. HR, Talent, Time Management, Benefits and Payroll. Informed by data and designed for people. Learn more at ADP.com
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