US private sector employment rose less than expected in June, signaling a slowdown in job creation ahead of the closely watched official labor market report due Thursday.
Private employers added 98,000 jobs in June, down from an unchanged 122,000 in May, according to the ADP National Employment Report released Wednesday.
The figure came below the market forecast of 118,000.
The report, produced by ADP Research in collaboration with the Stanford Digital Economy Lab, showed that job creation remained concentrated in services, which added 96,000 positions, while goods-producing industries gained only 2,000 jobs.
Education and health services led employment growth with 48,000 new jobs, followed by trade, transportation, and utilities with 15,000, financial activities with 14,000, and other services with 8,000.
Information added 7,000 jobs, while professional and business services, construction, and leisure and hospitality each posted gains of 2,000.
Natural resources and mining was the only sector to record a decline, shedding 5,000 jobs.
"Job creation was uneven in June," ADP said, adding that financial activities and information were among gainers, while leisure and hospitality posted a sixth month of weak hiring.
"The pace of hiring is telling a story of both supply and demand," said Nela Richardson, chief economist at ADP.
"We know it's taking people longer to find work, but there also are signs of labor supply constraints in certain industries. For now, the overall effect is a slowdown in job creation," she added.
By firm size, small establishments with fewer than 50 employees added 53,000 jobs, medium-sized firms added 29,000, and large establishments with 500 or more employees created 25,000 positions.
On wages, annual pay growth for job-stayers was little changed at 4.4%, while pay growth for job-changers accelerated to 6.6%.
The ADP data comes one day before the US Labor Department's nonfarm payrolls report, which markets and Federal Reserve officials closely monitor for signals of the strength of the labor market and the outlook for monetary policy.
