The numbers: Private-sector employment remained solid in June, as employers added 177,000 jobs, Automatic Data Processing Inc. reported Thursday. That gain was close to the forecast from economists polled by Econoday, who had expected on average an increase of 190,000. May’s gain was upwardly revised to show 189,000 growth instead of a previously estimated 178,000.
What happened: Details of ADP’s report showed that small firms added 29,000 jobs in June, medium-sized businesses added 80,000 to large companies added 69,000.
Big picture: The labor market is seen as strong, with employment gains averaging 207,000 per month so far this year.
Economists use ADP’s data to get a feeling for the Labor Department’s employment report, which will be released Friday and covers government jobs in addition to the private sector. Economists polled by MarketWatch expect nonfarm payroll jobs rose 200,000 in June, down from 223,000 in the prior month. The unemployment rate is expected to hold steady at 3.8%, an 18-year low.
What are they saying: The unemployment rate is heading to the low 3% range that hasn’t been seen since the Korean War, said Mark Zandi, chief economist of Moody’s Analytics, the firm that helps prepare the report. This low jobless rate will make life difficult for the Federal Reserve, he said. “I think the Fed has got to look through most of everything and focus on that. Because if they don’t, this economy is going to overheat and we’re going to end up back in recession. And the odds of that are already rising pretty significantly. It is going to be tough for them to land this plane,” Zandi said on CNBC.
Market reaction: Stocks YMU8, +0.75% held gains after the ADP data. Equities were set to rally on hopes that trade tensions may be easing with the European Union.
