Hiring by private companies unexpectedly accelerated in June, with the 176,000 new jobs surpassing economists’ expectations, new data from payroll giant ADP shows. June’s gains follow a upwardly revised figure of 136,000 for the month earlier. Economists had expected companies to add 95,000 workers last month.
The job growth was confined mostly to small- and medium-sized companies, which contributed 94%. Growth was greatest in the service sector, where employers added 16,000 jobs. Financial services expanded payrolls by 11,000. Manufacturing managed only 4,000 jobs.
Stocks opened down this morning, despite the upbeat reading on the labor market. The Dow Jones industrial average dropped 0.4% to 12,888.11. The S&P 500 lost 0.3% to 1,370.44. The Nasdaq retreated 0.1% to 2,974.69.
Energy stocks led the market lower. ConocoPhillips declined 1% to $55.85. Chevron gave up 1.3% to $106.03. Royal Dutch Shell slumped 1.2% to $67.64.
ADP figures come ahead of the government’s report on the labor market tomorrow. ADP’s data is often used as a last-minute tweak to forecasts, but rarely an exact match to the government report, which is expected to show 90,000 new nonfarm jobs and a100,000 rise in private payrolls.
The labor market went from adding 250,000 or more jobs a month from December to February to little more than 100,000 in past months—an especially grim report came last month, where the 69,000 added to payrolls in May were far less than expected.
Recent cooling in the labor market was first blamed on a payback from an unusually mild winter. But economists say worries about Europe’s solvency and a China slowdown are playing increasingly large roles in limiting U.S. job growth.
Separately today, the European Central Bank cut its key interest rates to 0.75% from 1%, and the Bank of England said it would add another $78 billion to its stimulus—each an effort to prop up the strained European economies.
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