The U.S. economy added 172,000 private, non-farm jobs from May to June, according to a monthly employment report released this morning by payroll-management firm ADP and its partner Moody's Analytics. The seasonally adjusted number, beating the Wall Street expectation of 152,000, is a modest growth compared to May's downward-revised 168,000 jobs, although is nearly 44% down from a year earlier. This month's result came as a relief at a time when the Federal Reserve put its proposed rate hike on hold due to a dismal May job report and the panic global market caused by Brexit.
"Today's ADP number feels like that the last several months have been temporary, and we are still in an economy that's creating a lot of jobs," Moody's Analytics chief economist Mark Zandi said in a conference call this morning. "(We are) still somewhere around 200,000 average monthly job gains that we've seen in the last five, six years."
This month, the construction sector shed 5,000 jobs, the first time employment in the sector went south in nearly five years. Construction's cool-off in June is a perplexing surprise, but Zandi said the industry is expected to reverse itself and continue to improve, especially in the single-family housing market. In addition, he argues that the oversea turmoil caused by Brexit would in fact push down the U.S mortgage rate and help consumers spend money, start re-financing activities, and rebuild equity of homes.
"These lower rates should be a pretty significant plus for the economy," Zandi added. "This should also support the home sales and home building in the single-family housing market."
About 55% of June's payroll gains ( 95,000 jobs) were made by small businesses with 50 or fewer employees, up from 84,000 in May. Very small firms, which employ 19 or fewer staffs, contributed more than half, or 52,000 jobs, to that figure.
ADP national employment index is often used to gauge the monthly Bureau of Labor Statistics jobs report, of which the June result will be released this Friday, though last month's BLS number came out shockingly lower than predicted (partially due to the 6-week strike of 35,000 Verizon employees). Zandi predicts that the BLS number will rebound to around 200,000 in June to be close to the ADP result.