US private payrolls beat expectations in June

[WASHINGTON] US private payrolls increased more than expected in June as companies rushed to boost production and services amid a rapidly reopening economy, though a shortage of willing workers continues to hang over the labour market recovery.

The ADP National Employment Report on Wednesday showed hiring in the leisure and hospitality sector accounting for nearly half of the increase in private payrolls last month.

Manufacturing payrolls growth slowed, likely reflecting labour shortages as well as scarce raw materials. A global shortage of semiconductors is hampering production of motor vehicles and some household appliances which require chips.

"The labour market is continuing to heal," said Rubeela Farooqi, chief US economist at High Frequency Economics in White Plains, New York. "Job growth is expected to pick up on a broader reopening, but timing is uncertain given it is unclear how quickly supply constraints will ease."

Private payrolls increased by 692,000 jobs last month. Data for May was revised lower to show 886,000 jobs added instead of the initially reported 978,000. Economists polled by Reuters had forecast private payrolls would increase by 600,000 jobs.

More than 150 million Americans have been fully vaccinated against Covid-19, allowing authorities to remove pandemic-related restrictions on businesses and mask mandates for people who have been inoculated.

Leisure and hospitality payrolls increased by 332,000 jobs, adding to the 414,000 positions created in May. There were also solid gains in education and health services payrolls. Factories added only 19,000 jobs, below the monthly average 43,000 jobs in the past three months. Hiring at construction sites was strong.

Employment gains were evenly spread among small, medium and large companies, indicating that the economy's recovery from the pandemic was broadening in scope.

REUTERS