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US added nearly 2.4 million workers to private sector payrolls in June: ADP

US added nearly 2.4 million workers to private sector payrolls in June: ADP
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U.S. private-sector businesses added nearly 2.4 million workers in June, according to the monthly employment report from the ADP Research Institute and Moody’s Analytics released Wednesday.

Nonfarm private sector businesses added 2,369,000 workers to payrolls in June, according to the report, almost 1.9 million of which were at service-sector businesses shuttered by the pandemic throughout spring.

“It looks like an economic recovery began in June,” said Mark Zandi, chief economist at Moody’s Analytics, in a Wednesday call with reporters. “This reflects rehiring of workers in industries hard hit by the pandemic, including the leisure and hospitality industry, retail, healthcare, construction and manufacturing.”

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The leisure and hospitality industry led all other sectors with a gain of 961,000 jobs, followed by construction (394,000), trade and utilities (288,000) and education and health (283,000).

Zandi also pointed to the 937,000 jobs added by businesses with between 1 and 49 employees, which outpaced those added by medium-sized businesses (559,000) and large businesses (873,000).

Even so, Zandi said the report showed several disconcerting signs of deeper, long-term troubles the U.S. economy could be facing.

Roughly a quarter of employed workers have lost hours or suffered wage cuts, Zandi said, which businesses seek to avoid in economic downturns.

“We’ve got a number of firms, businesses that are just in survival mode. It's really a matter of avoiding bankruptcy and failure and they have no choice,” Zandi said.

Zandi also noted that the June jobs recovery appeared to be entirely driven by reopening businesses bringing back workers as other firms that weathered the first wave of shutdowns continues to layoff workers.

“If we continue to see this high level of layoffs, we may start to see some significant weakening and job growth in the next few months if things don't change,” Zandi said. 

“The layoffs are kind of broader-based here, and it may be affecting different occupations, income groups, and peoples with different skill sets.”