US private sector added 2.37M jobs in June and saw surprise gain in May, ADP says

U.S. companies added fewer jobs than expected in June as a swath of restaurants and firms across the country reopened for business.
Businesses’ payrolls increased by 2.37 million in June following a revised 3.07 million gain in May that was previously reported as a decline, according to ADP Research Institute data released Wednesday. The median projection in a Bloomberg survey of economists called for a 2.9 million rise in June.
The hiring reflects a rebound in economic activity following pandemic-related shutdowns that brought an end to the longest-running expansion earlier this year. While the fiscal and monetary stimulus is helping the economy regain its footing, a gradual improvement in demand amid a pickup in coronavirus cases indicates the job market will take time to recover to pre-recession levels.
Service-provider employment climbed 1.91 million, while payrolls at goods producers increased 457,000 in June. The leisure and hospitality industry took on 961,000 workers, while construction firms added 394,000. In health care, employment rose by 246,000. Three industries -- mining, information, and management -- registered declines in payrolls.
The data precede the official jobs report on Thursday, which is forecast to show private payrolls jumped by another 3 million in June after a surprise 3.1 million surge in May. The unemployment rate is expected to continue to fall from its April peak, but the size of that decline may be limited by Labor Department efforts to resolve a misclassification issue that has caused the rate to understate the true degree of joblessness during the pandemic.
“As the economy slowly continues to recover, we are seeing a significant rebound in industries that once experienced the greatest job losses,” Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, said in a statement. “In fact, 70% of the jobs added this month were in the leisure and hospitality, trade, and construction industries.”
Payrolls at small businesses increased 937,000 and large businesses added 873,000 jobs. Medium-size businesses boosted payrolls by 559,000.
ADP’s payroll data represent firms employing nearly 26 million workers in the U.S.