The job market continued to grow in June, but wage growth slowed, payroll giant ADP
The service-providing sector added 136,000 jobs, including 25,000 in professional and business services such as accounting and tax preparation. The financial activities sector, which includes banking, added 11,000 jobs. The bulk of the gains in the service sector came from the leisure and hospitality industry, which gained 63,000 jobs.
"Overall service-providing firms are still giving us good numbers, but those numbers are quite concentrated," said ADP chief economist Nela Richardson during a conference call Wednesday with reporters.
The goods-producing sector added a relatively slack 14,000 jobs in June, mostly from the construction industry, which gained 27,000 jobs, offset by losses of 5,000 jobs in manufacturing and 8,000 in natural resources and mining.
"There is some reason to be concerned that the hiring is not as broad based as we'd like to see going into the second half of the year," said Richardson.
Small businesses added 5,000 jobs, with gains of 13,000 jobs in businesses with between one and 19 employees offset by a loss of 8,000 jobs in businesses with between 20 and 49 employees.
Medium-sized establishments added 88,000 jobs in June, including 65,000 in companies with between 50 and 249 employees, and 23,000 in organizations with 250 to 499 employees. Large establishments with 500 employees or more added 58,000 for the month.
Year-over-year pay gains for people who stayed at their jobs were 4.9% in June, but that was the slowest pace of growth since August 2021. Pay gains for job-changers also slowed to 7.7%. The rate of pay gains in the professional and business services sector for job stayers was 4.8%.
"When you look at pay gains by the firm size, they're pretty consistent across the board, with larger gains in medium firm size and larger firm size than in the small firms," said Richardson. "Overall, a very good jobs report, but not great, consistent with the cooldown that we've been expecting, but a very concentrated mix of jobs. That could highlight some upcoming continued weakness over the next six months."
