U.S. Private Payrolls Rise by 98,000 in June as Hiring Continues to Cool

Private-sector employers added 98,000 jobs in June , marking a slowdown from the 122,000 positions created in May , according to the latest ADP National Employment Report released Wednesday. The figures suggest employers are becoming more selective in hiring as the labor market gradually cools after several years of exceptionally strong employment growth. Annual pay growth for workers who stayed with their employers remained unchanged at 4.4% , while employees changing jobs received median raises of 6.6% .

Supply Constraints Meet Softer Demand

ADP said the slower pace reflects a combination of easing labor demand and persistent worker shortages in parts of the economy. Chief Economist Nela Richardson said companies are taking longer to fill vacancies while job seekers are also spending more time looking for work, creating conditions that have moderated overall hiring rather than triggering widespread layoffs. The data point to a labor market that is cooling without showing signs of an abrupt deterioration.

Education and Healthcare Lead Growth

Service-producing industries continued to account for nearly all employment gains, adding 96,000 jobs during the month. Education and health services generated the largest increase with 48,000 new positions , followed by trade, transportation and utilities with 15,000 and financial activities with 14,000 . Information services also expanded payrolls, while leisure and hospitality recorded only 2,000 new jobs , extending six consecutive months of subdued hiring in the sector.

Manufacturing Outperforms Other Goods Sectors

Goods-producing industries contributed just 2,000 jobs , underscoring the uneven nature of employment growth. Manufacturing added 5,000 positions , construction gained 2,000 , while natural resources and mining shed 5,000 jobs , offsetting much of the broader sector's gains. The divergence suggests industries tied to production and commodities continue to face different economic pressures than many service businesses.

Small Businesses Continue to Drive Employment

Smaller employers remained the primary engine of job creation. Businesses with fewer than 50 employees added 53,000 jobs , more than half of June's total increase. Medium-sized companies contributed 29,000 positions , while firms employing 500 or more workers expanded payrolls by 25,000 . Regionally, the South led hiring with 37,000 new jobs , followed by the Northeast at 33,000 , the Midwest with 21,000 , and the West with 17,000 .

Wage Growth Remains Firm Despite Slower Hiring

Although hiring moderated, wage pressures showed little sign of easing. Workers remaining in their current positions continued to receive median annual pay increases of 4.4% , while job changers saw wage growth accelerate to 6.6% , reflecting employers' willingness to pay premiums for experienced talent. Financial activities posted the strongest pay gains among job stayers at 5.1% , while manufacturing workers received median increases of 4.9% .

Markets Await Broader Employment Picture

The ADP report, which draws on payroll data covering more than 26 million private-sector employees , serves as one of the earliest monthly indicators of U.S. labor market conditions. While the June figures suggest the employment market continues to expand, the pace has become noticeably more restrained than earlier in the year. Investors and policymakers will now look to the government's official employment report to determine whether the moderation seen in ADP's data is reflected across the broader economy and whether the cooling trend is becoming more entrenched.