U.S. Private Payrolls Growth Slows to 150,000 in June, Missing Expectations

Last updated: July 3, 2024

two_persons_exchanging_dollar_billsPrivate payroll growth slowed to 150,000 in June, signaling a potential cooling in the U.S. labor market, according to ADP’s latest report.

This figure falls short of the revised 157,000 jobs added in May and the Dow Jones forecast of 160,000. It’s the lowest monthly gain since January, raising concerns about the market’s momentum.

Leisure and hospitality sectors bolstered the numbers with 63,000 new jobs, highlighting their crucial role. Without this surge, the overall figure would be much weaker.

Other sectors with notable increases included construction (27,000), professional and business services (25,000), other services (16,000), and trade, transportation, and utilities (15,000).

Conversely, natural resources and mining shed 8,000 jobs, manufacturing lost 5,000, and the information sector dropped by 3,000.

“Job growth has been solid, but not broad-based,” noted Nela Richardson, ADP’s chief economist. “Without the rebound in leisure and hospitality, June would have been lackluster.”

Wage growth also decelerated. Those staying in their jobs saw a 4.9% year-over-year increase, the smallest rise since August 2021. Job switchers experienced a 7.7% bump, continuing a downward trend.

Mid-sized companies (50-499 employees) led job creation with 88,000 new positions, while small businesses added just 5,000. Regionally, the South accounted for over half of the new jobs, with 80,000 additions.

ADP’s data precedes the Labor Department’s nonfarm payroll report, due Friday, which is expected to show a 200,000 job increase for June, following May’s 272,000.

Historically, ADP’s figures often diverge from the Bureau of Labor Statistics (BLS) data. For May, the BLS reported a 229,000 rise in private payrolls, significantly higher than ADP’s 157,000 estimate.

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Jon Morgan, MBA, LLM, has over ten years of experience growing startups and currently serves as CEO and Editor-in-Chief of Venture Smarter. Educated at UC Davis and Harvard, he offers deeply informed guidance. Beyond work, he enjoys spending time with family, his poodle Sophie, and learning Spanish.
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LJ Viveros has 40 years of experience in founding and scaling businesses, including a significant sale to Logitech. He has led Market Solutions LLC since 1999, focusing on strategic transitions for global brands. A graduate of Saint Mary’s College in Communications, LJ is also a distinguished Matsushita Executive alumnus.
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