Survey: June hiring up 237,000

Factories’ expansion best since January, trade group says

A job seeker completes an application during a job fair in Sunrise, Fla., on June 10. Payroll processor ADP said Wednesday that businesses added 237,000 jobs last month.
A job seeker completes an application during a job fair in Sunrise, Fla., on June 10. Payroll processor ADP said Wednesday that businesses added 237,000 jobs last month.

WASHINGTON -- U.S. businesses added jobs at a robust pace in June, a private survey found, evidence that rising consumer spending and a healthy housing market are supporting more hiring.

Payroll processor ADP said Wednesday that businesses added 237,000 jobs last month, up from 203,000 in May. That is the most since December, according to the ADP's tally.

"The U.S. job machine remains in high gear," Mark Zandi, chief economist at Moody's Analytics Inc. in West Chester, Pa., said in a statement. Moody's produces the figures with ADP. "The current robust pace of job growth is double that needed to absorb the growth in the working age population."

Americans have spent freely in recent months and home sales are running at their best pace in eight years. Construction firms added 19,000 jobs last month, while retail, shipping and utility companies gained 50,000.

The government today will issue its official jobs report for June. Economists forecast it will show that employers added 233,000 jobs, and the unemployment rate fell to 5.4 percent from 5.5 percent.

The ADP report is based on data from private businesses with almost 24 million workers on their combined payrolls. The survey frequently diverges from the official figures. In May, the government said employers created 280,000 new jobs, much more than the ADP estimate.

Companies with fewer than 50 employees accounted for half the total job gains, adding about 120,000 jobs. Businesses with 50 to 499 workers gained about 86,000, and large companies hired only about 32,000 new workers.

Manufacturers added 7,000 jobs, their first increase since February. That suggests factories are recovering from headwinds such as cheaper oil and the strong dollar, which has risen about 15 percent in value in the past year compared with overseas currencies. That increase makes U.S. goods more expensive overseas, cutting into exports.

The ADP report reinforces other data Wednesday that show the economy is on an upswing.

The Institute for Supply Management, a trade group of purchasing managers, said Wednesday that its manufacturing index rose to 53.5 last month from 52.8 in May. Manufacturing activity matched January's level for the highest this year. Any reading above 50 signals expansion.

Manufacturing growth has accelerated for the past two months.

The gauge of new orders rose slightly to 56 from 55.8. Manufacturers are responding to the increased demand by hiring more workers, as the employment measure increased to 55.5 from 51.7, a sign that many companies expect additional orders in the coming months and are hiring in advance.

"When it goes up like that, it's in anticipation of future orders," said Bradley Holcomb, chairman of the Institute for Supply Management's manufacturing business survey committee.

Not every element of the index reflected growth. The index's measure of production slipped to 54 from 54.5.

Of the 18 industries surveyed, four reported contracting in June: petroleum and coal products, primary metals, plastics and rubber products, and machinery.

U.S. construction spending posted a solid gain in May, pushing total activity to the highest point since the fall of 2008, with the strength led by a big jump in nonresidential projects.

Total construction spending increased 0.8 percent in May, after an even bigger 2.1 percent advance in April, the Commerce Department reported Wednesday. The gains pushed total activity to a seasonally adjusted annual rate of $1.04 trillion, the highest level since October 2008.

All major categories showed increases in May, led by a 1.5 percent rise in nonresidential building, which reflected increases in spending on hotels, manufacturing facilities and amusement parks. Residential construction was up a more modest 0.3 percent. Spending on government projects rose 0.7 percent.

Construction activity is expected to be a source of strength this year, helping the economy to accelerate after a soft patch at the beginning of the year.

Information for this article was contributed by Christopher S. Rugaber, Josh Boak and Martin Crutsinger of The Associated Press and Shobhana Chandra of Bloomberg News.

Business on 07/02/2015

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