ROSELAND, N.J. - The U.S. private sector saw an increase of 150,000 jobs in June, while annual pay rose by 4.9 percent compared to the same month last year, as reported by the ADP® National Employment Report™.
This independent measure of private-sector employment and pay is based on actual payroll data from over 25 million U.S. employees and is produced by the ADP Research Institute® in collaboration with the Stanford Digital Economy Lab.
June's job growth was supported significantly by the leisure and hospitality sector, which added 63,000 positions. Without this sector's performance, the month's employment figures would have been considerably weaker, according to chief economist at ADP. The report also noted job creation among private employers has decelerated for three consecutive months.
In terms of pay, the growth for job-stayers has slowed to 4.9 percent, marking the most modest pace since August 2021. Job-changers experienced a slower pay gain as well, at 7.7 percent.
The report provides a detailed breakdown of employment changes by industry, U.S. regions, and establishment size. The goods-producing sector added 14,000 jobs, with construction leading with 27,000 new jobs, while manufacturing and natural resources/mining saw declines.
The service-providing sector contributed 136,000 jobs, with notable increases in professional/business services and trade/transportation/utilities, among others.
Geographically, the South led with 80,000 new jobs, followed by the Northeast with 31,000. The Midwest and West added 26,000 and 4,000 jobs, respectively. When analyzed by establishment size, medium-sized businesses (50-499 employees) showed the most substantial growth, adding 88,000 jobs.
The data also provided insights into pay gains across industry sectors and firm sizes, with job-stayers in the leisure/hospitality and education/health services sectors seeing the highest increases.
The May job figures were revised up from 152,000 to 157,000. This monthly report is part of ADP's commitment to offering deeper insights into the labor market and is widely distributed to the public at no cost.
The next ADP National Employment Report is scheduled for release on July 31, 2024. This article is based on a press release statement from ADP, Inc.
In other recent news, Automatic Data Processing (NASDAQ:ADP) has demonstrated robust financial performance in the third quarter of fiscal 2024, marked by a 7% increase in revenue and a 14% growth in adjusted diluted earnings per share (EPS).
This strong performance led the company to revise its full-year outlook, expecting higher Employer Services (ES) retention and margin, and increased client funds interest revenue due to rising interest rates. ADP forecasts a 2% growth for the year, at the upper end of the previous 1% to 2% projection. The company also expects an effective tax rate of approximately 23% and an adjusted EPS growth of 10% to 12% for fiscal '24.
RBC Capital maintained a Sector Perform rating on ADP, with a steady price target of $267.00. The firm anticipates guidance for fiscal year 2025 to indicate revenue growth between 4.5% and 5.5%, alongside 7% to 9% growth in earnings per share (EPS).
Meanwhile, TD Cowen maintained a Hold rating on ADP shares, albeit with a slight reduction in the stock price target from $253 to $251. This adjustment took into account an increase in float revenue for ADP, balanced by a reduced expectation for margin expansion in the future.
These recent developments reflect ADP's ability to navigate a challenging market environment and deliver solid performance, as recognized by both RBC Capital and TD Cowen.
InvestingPro Insights
As the ADP® National Employment Report™ highlights the performance of the U.S. private sector, Automatic Data Processing, Inc. (ADP) remains a significant contributor to employment data analytics. With a market capitalization of $96.85 billion, ADP's influence on the labor market is backed by substantial financial clout. The company's commitment to consistent dividend increases is noteworthy, having raised its dividend for 25 consecutive years, a testament to its financial stability and shareholder-friendly policies.
InvestingPro data indicates that ADP operates with a trailing twelve months Price/Earnings (P/E) ratio of 26.22, which suggests a premium valuation relative to its near-term earnings growth. Furthermore, ADP's stock tends to exhibit low price volatility, providing a degree of stability for investors. The company's dividend yield as of mid-2024 stands at 2.37%, coupled with a 12.0% dividend growth, which could be attractive for income-seeking investors.
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