Economic analysts point to a slower rate of private sector job creation in June as a telling sign that the economy is close to reaching full employment, according to a new report released on Thursday from ADP and Moody’s Analytics.
Moody’s chief economist Mark Zandi stated that despite the comparatively lower number of jobs created this month, “The job market continues to power forward.” He added, “At this pace, which is double the rate of labor force growth, the tight labor market will continue getting tighter.”
Companies added 158,000 positions in June, which is well below the 230,000 jobs added in May and previous estimates that looked at the robust growth since the President was elected in November and predicted 253,000.
The government is expected to release its monthly nonfarm payrolls report on Friday. At this point, market analysts expect to see a gain of roughly 180,000 jobs in June.
The ADP/Moody’s report shows that all of the new jobs were created in the services industry, with professional and business positions showing the largest gain at 69,000. Administrative and support services created 43,000 new positions while the trade, transportation and utilities category hired 30,000 new workers.
Education, on the other hand, lost 6,000 jobs, and natural resources and mining jobs fell by 4,000. Construction companies cut 2,000 workers.
As the labor market tightens up, industry experts are interested to see when wages will be affected. Salary growth so far has been stagnant, and June numbers are predicted to rise at an annualized gain of 2.6 percent.
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