The private sector added 2.4 million jobs in June, according to ADP's national employment report released on Wednesday. The report also included a massive revision to its May data, saying there were 3.1 million jobs added that month rather than 2.8 million lost (as initially estimated).
Why it matters: The labor market slowly continued to heal in early June, after historic job losses during the coronavirus pandemic. The ADP report is closely watched for what's to come in the official jobs release from the government (out tomorrow), though it's far from a perfect proxy.
Details: ADP says 70% of the jobs added in June were from the leisure, hospitality, trade and construction industries — all of which took massive blows when the economy shut down to prevent the spread of the coronavirus.
- "We are seeing a significant rebound in industries that once experienced the greatest job losses," Ahu Yildirmaz, co-head of the ADP Research Institute, said in a release.
- Small businesses with 50 or fewer employees accounted for nearly 40% of private-sector employment last month.
Between the lines: May's big revision was a result of "benchmarking the ADP number" to the figure released by the government — essentially back-fitting it to be more in line with Bureau of Labor Statistics data, says Mark Zandi, chief economist at Moody's Analytics, which jointly releases the report with ADP.
- You can’t glean from the revision alone "that something positive is happening in the labor market," says Zandi.
- ADP's figures for June show a hiring slowdown from its May revised numbers.
Of note: Zandi also said on a press call there's been a slowdown in economic activity in states that have seen a surge in coronavirus cases.
- "This is the real threat to the nascent recovery," Zandi says.
- The ADP report didn't pick up any effect from the re-intensification of the virus because of when it collected the data. The same will be the case for the government jobs report tomorrow, where economists are expecting 2.9 million jobs to have been added.