CHRISTOPHER S. RUGABER, AP Economics Writer
WASHINGTON (AP) — U.S. companies added 172,000 jobs last month, according to a private survey, a sign that hiring may have recovered after a slowdown in April and May.
Payroll processor ADP said Thursday that service firms, such as retailers and transportation companies, added jobs at a solid pace in June. Manufacturers shed 21,000 jobs, while construction companies cut 5,000.
June’s figure was slightly higher than May’s gain of 168,000, which was revised lower.
The figures suggest that the government’s jobs report, to be released Friday, could show that hiring picked up from May’s dismal 38,000 gain. Average monthly job gains slowed to just 116,000 in March through May, about half last year’s pace.
Still, the ADP data cover only private businesses and often diverge from the official figures.
The report hints “that the last several months have been temporary and that we’re still in an economy that is creating a lot of jobs,” Mark Zandi, chief economist at Moody’s Analytics, said. Moody’s compiles the figures from ADP payroll data.
U.S. economic growth slowed in the first quarter and hiring stumbled, as Americans were more cautious in their spending and a stronger dollar and weaker growth overseas cut into exports.
The United Kingdom’s vote to leave the European Union late last month has further clouded the picture for the U.S. economy.
One example of the challenges stemming from overseas turmoil is that large U.S. companies with 1,000 or more employees added just 4,000 jobs last month, the ADP said, the fewest in a year. The strong dollar has cut into the overseas profits of those firms by making their products more expensive.
Friday’s government jobs report will be one of the most closely-watched in months. The slowdown in U.S. hiring, along with the first quarter’s weak growth of 1.1 percent at an annual rate, has raised concerns about the economy’s health.
The uncertainty around hiring and growth is a key reason that Federal Reserve officials have put future interest rate increases on hold. The Fed raised the short-term rate it controls in December after pinning it at zero for seven years.
Yet they haven’t raised the rate since, after sharp swings in the stock market earlier this year. Many economists now forecast they won’t move again until December or even next year.
Still, there are signs the economy is picking up. Americans increased their spending at a healthy pace in May and home sales have been solid. Economists forecast growth could rebound to about 2.5 percent in the April-June quarter.
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