FOX Business’ Cheryl Casone breaks down the June ADP report, which comes in below expectations at 2.37 million.
Private employers 2.37 million jobs in June as states allowed businesses shuttered by the coronavirus outbreak to reopen and start rehiring out-of-work Americans, according to the ADP National Employment Report released Wednesday.
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The number is slightly below the 3 million forecast by Refinitiv economists.
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June hiring was concentrated in the leisure and hospitality industry, the sector hit hardest by the coronavirus pandemic and subsequent economic lockdown. Last month, it added 961,000 new jobs last month -- far more than any other industry.
Other sectors that accounted for the gain included health care and social assistance, which added 246,000, and education, which saw an increase of 36,000. Trade, transportation and utilities jumped by 288,000, and construction surged by 394,000. Manufacturing added 88,000 new positions last month.
Small businesses led industries by size with the addition of 937,000 jobs last month. Medium-sized businesses added 559,000 jobs, and large businesses grew by 873,000.
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“Small business hiring picked up in the month of June,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. “As the economy slowly continues to recover, we are seeing a significant rebound in industries that once experienced the greatest job losses."
The number actually marked a decline from May, which saw a large upward revision to a gain of 3 million from the initially reported loss of 2.76 million. The reason for the positive shift last month is because ADP's objective is to predict the Department of Labor's more-encompassing employment numbers; to do so accurately, the firm begins the new estimate with the most recent jobs report number, Moody's economist Mark Zandi said during a call with reporters. Last month, that was 2.5 million.
"The consensus was just very wrong. ADP was wrong," Zandi said. "That difference, though, between the ADP number and the BLS number is the reason for the big revision in the May number. There is no information in that revision."
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The data is typically a good indicator of what to expect in the more closely watched jobs report from the Labor Department, which is predicted to show the U.S. economy added 3 million jobs last month, up from May's gain of 2.509 million, a record high. Analysts anticipate unemployment will edge down to 12.3 percent from May's 13.3 percent as the economy gradually starts to recover.
The report will be released Thursday at 8:30 a.m. ET, a day early because U.S. markets will be closed Friday for the Fourth of July holiday.
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But the labor market's slow recovery comes amid a resurgence of COVID-19 cases in some states. On Thursday, the nation set a record high of nearly 40,000 new cases. Alabama, Texas, Idaho and Nevada were among the states that notched their own peak in cases. If the outbreak of the virus intensifies, forcing businesses to shut down again, economists have warned the consequences could be dire.
“I think a second wave would really undermine public confidence and might make for a significantly longer recovery and weaker recovery,” Federal Reserve Chairman Jerome Powell said at the end of May.
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US private sector added 2.37M jobs in June, ADP says - Fox Business
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