Survey: U.S. businesses add decent 172,000 jobs in June
WASHINGTON -- U.S. companies added 172,000 jobs last month, according to a private survey, a sign that hiring may have picked up after a slowdown in April and May.
"Job growth revived last month from its spring slump. Job growth remains healthy except in the energy and trade-sensitive manufacturing sectors," Mark Zandi, chief economist of Moody's Analytics, noted. "Large multinationals are struggling a bit, and Brexit won't help, but small- and mid-sized companies continue to add strongly to payrolls."
Payroll processor ADP says that service firms, such as retailers and transportation companies, added jobs at a solid pace in June. Manufacturers shed 21,000 jobs, while construction companies cut 5,000.
June's figure was slightly higher than May's gain of 168,000, which was revised lower.
The figures suggest that the government's jobs report, to be released Friday, could be healthier than May's dismal 38,000 gain. Average monthly job gains slowed to just 116,000 in March through May, about half last year's pace.
Yet the ADP data cover only private businesses and often diverge from the official figures.
Separately, a report from the government found fewer Americans sought unemployment benefits last week, a sign that U.S. workers still have job security despite recent tremors in the global economy.
The Labor Department said Thursday that weekly applications fell 16,000 to a seasonally adjusted 254,000. The 4-week average, which is less volatile, dipped slightly to 264,750.
Unemployment claims are a proxy for layoffs. The 70-week streak of claims staying below 300,000 is the longest since 1973. It's evidence that employers view their business prospects as being strong enough to keep workers on the job, even as Britain's vote to depart the European Union has further compounded the volatility seen in the financial markets this year.
There were recent signs that employers were turning somewhat pessimistic about the pace of growth as monthly hiring slowed sharply in April and May. Employers added just 38,000 jobs in May, the fewest in more than five years.
But economists expect the government jobs report being released Friday will show a pick-up in June, with estimates that employers added 180,000 workers.
The modest level of unemployment benefits indicates that employers are looking past the sluggish 1.1 percent annual U.S. economic growth recorded from January to March. The total number of people receiving benefits has dropped 7.8 percent from a year ago to 2.12 million.
Many economists are forecasting growth in excess of 2 percent for the second quarter ended in June.
Still, the Federal Reserve has held off on any changes to its short-term interest rates. The U.S. central bank that once hinted at the possibility of multiple hikes in its federal funds rate this year has yet to take action so far, citing uncertainty about the economy and global factors such as weaker growth abroad.