U.S. businesses went on a hiring spree in June, according to a survey of hiring released Wednesday. The higher-than-expected increase in private-sector payrolls could raise expectations for the government's employment report, due Thursday.
Businesses added 281,000 new jobs in June, according to a national employment report compiled by payroll processor Automatic Data Processing Inc. ADP -0.32% and forecasting firm Moody's Analytics.
Economists surveyed by The Wall Street Journal expected ADP to report a June advance of just 210,000. The May ADP employment increase was unrevised at 179,000.
The ADP estimate is issued ahead of the one of the most scrutinized economic indicators: Thursday's monthly employment report from the Labor Department. Economists expect that data to say June nonfarm payrolls increased 215,000, close to the 217,000 added in May, and the unemployment rate stay steady at 6.3%.
Wednesday's unexpectedly high ADP result may prompt economists to reconsider their June nonfarm payrolls estimates. Forecasters look at ADP as a guide for payrolls, but the private-sector report has a history of large misses when it comes to anticipating the Labor Department data.
According to ADP, firms employing between 1-49 workers added 117,000 new workers last month. Medium-size businesses with payrolls of 50-499 workers increased payrolls by 115,000 employees. Large firms, businesses with 500 or more employees, hired 49,000 more workers.
Service-sector payrolls increased by 230,000 workers last month. The factory sector added 12,000 positions. Construction payrolls increased by 36,000 slots.
ADP, of Roseland, N.J., offers payroll processing, human resource and benefit administration services to about 620,000 clients world-wide. Economics firm Moody's Analytics is a subsidiary of Moody's Corp.
By Kathleen Madigan
Private Sector Creates 281,000 Jobs in June, Says ADP
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