July 6 (UPI) — The private sector added nearly a half-million jobs to its payrolls in June, according to the monthly ADP National Employment Report, released Thursday, blowing past Wall Street estimates but raising concerns that the economy is still running too hot to cool continuing inflation fears.
The report said the service industry made up the bulk of the 497,000 non-farm jobs created in June. The service-providing sector accounted for 373,000 hires while goods producers provided 124,000.
Economists estimated that a total of 220,000 jobs would be added.
“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” Nela Richardson, chief economist, ADP, said in a statement. “But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge.”
The ADP private report comes a day before the Labor Department releases its jobs that economists anticipate an increase of 240,000 jobs.
The robust reports could add more incentive for the Federal Reserve to increase interest rates in the coming months. Federal Reserve chair Jerome Powell in previous comments all but assured new rate increases if inflation remains elevated above the 2% benchmark.
The Dow Jones Industrial Average fell more than 300 points in early trading after the ADP report.
Inside the ADP report, the leisure/hospitality sector saw 232,000 new jobs while the Northeastern region created 250,000 new payroll positions.
Not everything in the report was rosy, with jobs from America’s largest companies, with more than 500 employees, contracting by 8,000. Manufacturing jobs also tumbled by 42,000.
