Small business, including leisure and hospitality, power rebound
The numbers: Private-sector employers added 2.37 million jobs in June, Automatic Data Processing Inc. reported Wednesday. Economists surveyed by Econoday expected a gain of 3.5 million.
What happened: Small employers added 937,00 jobs in June. Midsize companies added 559,000 jobs. And large businesses added 873,000. The services sector experienced a large gain in June, adding 1.9 million jobs.
Big picture: The ADP data hasn’t lined up with the government data since the pandemic began in March. Last month, ADP reported 2.76 million job losses, with the government reported net gains of 3.1 million jobs.
Economists surveyed by MarketWatch expect a gain of 3.9 million jobs in June, with the unemployment rate improving, slightly to 13% from 13.3% in May. There is some concern that June could be a high-water mark as many states were slowing down activity late in the month due to a spike in coronavirus cases.
Overall, economists are struggling to understand trends in the job market. Suffice to say it remains weak. Even if there is a gain of 4 million payroll jobs in June, the level of employment will be over 15 million below its recent peak. Low-paying service sector jobs were decimated by the pandemic.
What ADP says: “As the economy slowly continues to recover, we are seeing a significant rebound in industries that once experiences the greatest job losses,” including leisure, hospitality, trade and construction industries, said Ahu Yildirmaz, co-head of the ADP Research Institute.
Market reaction: U.S. equity benchmarks were set to open lower on Wednesday, the start of the third quarter. Stocks performed well in the April-June quarter with the S&P 500 index
up nearly 20%.