Private US firms added 692,000 jobs in June, a sharp decline from May, according to payroll services firm ADP, but the result was far more than economists expected.

The vast majority of positions were in the dominant services sector, while construction firms gained 47,000 and manufacturing just 19,000, the report said.

And the data reflected the continuing recovery of sectors hardest hit by the Covid-19 pandemic shutdowns, with nearly half the gains -- 332,000 -- in leisure and hospitality.

"The labor market recovery remains robust, with June closing out a strong second quarter of jobs growth," ADP chief economist Nela Richardson said.

"While payrolls are still nearly seven million short of pre-COVID19 levels, job gains have totaled about three million since the beginning of 2021."

Nearly half the private job gains in June were in leisure and hospitality, reflecting business reopenings, according to the ADP report
Nearly half the private job gains in June were in leisure and hospitality, reflecting business reopenings, according to the ADP report AFP / Frederic J. BROWN

Economists projected a gain of just 400,000 private sector jobs in the month, following the increase of 886,000 in May.

The report is a preview of the all-important government employment data due out on Friday, which has a consensus forecast of 680,000 non-farm job gains with the unemployment rate ticking down to 5.7 percent.

But the ADP data are not always in sync with the official figures

Ian Shepherdson of Pantheon Macroeconomics summarized the ADP report calling it "Decent but still no cigars."

He cautioned that the data is "noisy" and after understating official job gains for months, recently has overshot the Labor Department data.

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