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U.S. adds most private-sector jobs in six months, ADP says

MARKETWATCH 8:42 AM ET 07/01/15

Private-sector hiring rose to the fastest pace in half a year in June, showing the U.S. labor market "remains in high gear," according to a report released Wednesday.

Employers added 237,000 private-sector jobs in June -- the most since December -- pushing past a consensus estimate from economists of 220,000.

"The current robust pace of job growth is double that needed to absorb the growth in the working age population," said Mark Zandi, chief economist of Moody's Analytics, which prepares the report using ADP's data. "Most encouraging is the healthy rate of job growth among the nation's smallest companies."

According to ADP, small private-sector businesses added 120,000 jobs in June, medium businesses added 86,000 and large businesses added 32,000.

Most of those gains were in the service sector -- 225,000 jobs added there, compared to 12,000 for goods producers.

ADP tweaked May's gain to 203,000 jobs from a prior estimate of 201,000.

Economists use ADP's data to get a feeling for the U.S. Labor Department's employment report, which will be released Thursday and covers government jobs in addition to the private sector. expect the government's report to show nonfarm employment rose by 225,000 jobs last month, compared with May's gain of 280,000 jobs.

Consumers -- a key component of the economy -- are growing more upbeat about the U.S. labor market. Readings this year on their labor-market views have been the strongest since around the start of the recession, which officially began at the end of 2007.

Also read:Confidence in jobs market strongest since Great Recession (http://www.marketwatch.com/story/confidence-in- jobs-market-strongest-since-great-recession-2015-06-30)

There's reason for optimism. The U.S. employment environment is strengthening, with average monthly job growth over the year through May reaching 255,000 spots, compared with an average of 208,000 a year earlier. Wage growth (http:// www.marketwatch.com/story/faster-job-gains-are-great-but-bigger-paychecks-still-await-2015-06-28)is starting to pick up, with employers having trouble filling spots and holding onto employees.

Workers with job security and opportunities are more likely to spend, thereby supporting the broader economy, including major outlays, such as a home.

However, there are some points of weakness. Low oil prices have taken a toll in the oil fields, leading to a surge in layoffs (http://www.marketwatch.com/story/layoff-announcements-at-five-year-high-challenger-says-2015-07-01)this year. Also, some jobless workers face a particularly harsh labor market -- almost three-in-10 unemployed people have been looking for a new spot for at least half a year. And workers without permanent jobs have seen their share of the total labor force grow in recent years, a trend that can reduce families' financial stability.

-Ruth Mantell; 415-439-6400; [e-mail]

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