Key takeaways:
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Temporary help services employment continues to decline: Temp help services lost 2,600 jobs in June, extending the sector’s downward trend — signaling weaker demand for contingent labor.
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Private sector hiring slows sharply: ADP reported a 33,000 job decline in private employment, with heavy losses in professional and business services — key sectors for staffing firms.
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Wage growth remains resilient: Despite slower hiring, wage growth remains strong — job-stayers saw 4.4% and job-changers 6.8% annual increases — potentially raising candidate expectations and recruiting challenges.
Nonfarm payroll added 147,000 jobs, according to the latest report from the Bureau of Labor Statistics (BLS). This is in line with May’s revised figure of 144,000 (up from the previously reported 139,000) and April’s revised figure of 158,000 (up from 147,000). The upward revisions mean employment in April and May combined is 16,000 higher than previously reported.
Most of the employment growth for June was in government (+73,000) and health care (+39,000). State government employment saw significant gains (+47,000), primarily driven by education (+40,000). But federal government continued to lose jobs (-7,000), marking its seventh consecutive month of decline with employment down 69,000 since its recent peak in January.
Professional and business services lost 7,000 jobs, with a cut of 2,600 in temporary help services.
Other highlights from the latest BLS report include:
- The unemployment rate edged down to 4.1% over the month, with 7.0 million people unemployed.
- The employment-population ratio held steady at 59.7%, and the labor force participation rate decreased slightly by 0.1 percentage point to 62.3%.
- The number of people employed part time for economic reasons decreased to 4.5 million.
- The number of people not in the labor force who currently want a job was essentially unchanged at 6.0 million.
- Average hourly earnings increased by 8 cents to $36.30, adding to a 3.7% rise over the past 12 months.
Private employment drops 33,000 jobs
While the BLS reported steady job growth, ADP’s National Employment Report showed a decline of 33,000 jobs in private sector employment for June, marking its first negative reading since April 2020. This represents a sharp reversal from May’s revised figure of 29,000 jobs (down from the initially reported 37,000).
June losses were concentrated in service-providing sectors, which lost 66,000 jobs, led by professional and business services (-56,000) and education and health services (-52,000). This was partially offset by gains in goods-producing sectors (+32,000), with manufacturing (+15,000) and construction (+9,000) showing strength.
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Dr. Nela Richardson, chief economist at ADP. “Still, the slowdown in hiring has yet to disrupt pay growth.”
Year-over-year pay gains held steady in June, with job-stayers seeing 4.4% wage growth (down slightly from May’s 4.5%) and job-changers experiencing 6.8% wage growth (down from May’s 7.0%).
