Private employers added 98,000 jobs in June, payroll processor ADP reported Wednesday, falling short of what economists had predicted and marking the weakest month of hiring in three months.
According to CNBC, the Dow Jones consensus forecast had called for 110,000 new positions. Economists surveyed by Bloomberg had predicted a gain of 120,000. May's total came in at 122,000, unrevised.
Nearly half of June's growth came from one sector. Education and health services added 48,000 positions, continuing a pattern that has made the sector the most consistent driver of payroll gains this year. All but 2,000 of the month's new jobs came from services industries overall.
Other sectors posting gains included trade, transportation and utilities, which added 15,000 jobs, followed by financial activities at 14,000 and other services at 8,000. Leisure and hospitality added just 2,000 positions, continuing what has been a slow year for an industry often watched as a measure of underlying consumer demand. Natural resources and mining lost 5,000 jobs, making it the only sector to shed workers during the month.
Small businesses drove most of the hiring. Establishments with fewer than 50 employees added 53,000 workers. Companies with 500 or more employees added 25,000, while mid-sized firms added 29,000.
Pay data showed annual gains of 4.4% for workers who stayed in their jobs. Job switchers saw pay rise by 6.6%.
ADP chief economist Nela Richardson pointed to both sides of the labor market as factors behind the slowdown. "The pace of hiring is telling a story of both supply and demand," Richardson said. "We know it's taking people longer to find work, but there also are signs of labor supply constraints in certain industries. For now, the overall effect is a slowdown in job creation."
Richardson also noted on a Wednesday call that growth in education and health services is itself beginning to slow. That trend "will affect overall job creation" if it continues, she said, since other industries "are not picking up the slack for a decelerating health care sector."
Other data released this week offered some different signals. Layoff announcements fell in June, and job openings for the prior month came in stronger than economists had predicted, according to Yahoo Finance. Still, hiring overall remains soft.
The ADP report serves as a precursor to the more closely watched government jobs report. The Bureau of Labor Statistics is scheduled to release its nonfarm payrolls count on Thursday. Wall Street expects that report to show a gain of 115,000 jobs for June, with the unemployment rate holding steady at 4.3%. Average hourly earnings are forecast to rise 0.3% for the month and 3.5% annually.
ADP's count has generally run below the official government figure in recent months, which has shown mostly solid job creation through the year.
