U.S. private payrolls increased more than expected in June and fewer Americans applied for unemployment benefits last week, suggesting a rebound in job growth after May’s paltry gains.
Reuters reports the ADP National Employment Report showed private employers hired 172,000 workers in June, beating market expectations for a 159,000 gain. Private payrolls rose 168,000 in May.
The ADP report, which is jointly developed with Moody’s Analytics, was published ahead of the government’s more comprehensive employment report for June scheduled for release on Friday.
The report, according to Reuters, underscores the economy’s strength and supported views that the United States would weather the impact of last month’s British referendum to leave the European Union.
“The labor market is tight, there are plenty of job openings, firms are holding onto labor, and the main factor restraining job growth is a skills mismatch between available workers and the needs of employers,” John Ryding, chief economist at RDQ Economics in New York, told Reuters.
Job growth in June is expected to get a boost from 35,100 Verizon workers who were excluded from the nonfarm payrolls count in May while on a monthlong strike.
May’s weak job gains and the pending Brexit referendum prompted the Federal Reserve to keep interest rates unchanged last month. Even if payrolls rebound in June, economists say the stunning Brexit vote made it unlikely that the U.S. central bank would hike rates before the end of the year.
Minutes of the Fed’s June 14-15 meeting published on Wednesday showed U.S. central bank officials “agreed that … it was prudent to wait for additional data on the consequences of the U.K. vote.” The Fed raised its benchmark overnight interest rate in December for the first time in nearly a decade.
Reuters has the full story.
