The Economy

Private Sector Hiring Hits Six-Month High

Employment numbers, along with factory activity data, are latest indicators that the U.S. economy is rebounding from the slow start to 2015.
Matthew HellerJuly 1, 2015

In another indication that the U.S. economy is picking up after a slow start to the year, the ADP Research Institute reported Wednesday that private-sector employment rose by 237,000 in June, the largest increase in six months.

The latest ADP National Employment Report beat the median forecast among economists surveyed by Reuters of a gain of 218,000 jobs. Private payrolls increased by 203,000 in May.

June’s gain marked the third straight month of improvement since the pace of hiring slumped to a 14-month low back in March.

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“The U.S. job machine remains in high gear. The current robust pace of job growth is double that needed to absorb the growth in the working-age population,” Mark Zandi, chief economist for Moody’s Analytics, told The New York Times.

In a separate report, the Institute for Supply Management said Wednesday its national factory activity index rose to 53.5 in June, a five-month high, from a reading of 52.8 in May. It was the second straight month of gains in the index.

A reading above 50 indicates expansion in the manufacturing sector. A gauge of new orders received by factories increased for a third straight month.

And in more positive economic news, the Commerce Department said construction spending increased 0.8% to an annual rate of $1.04 trillion in May, the highest level since October 2008.

“Economic reports, including employment, consumer spending, confidence and housing, have assumed a strong note in recent months, suggesting growth was gaining steam after gross domestic product fell at a 0.2 percent annual rate at the start of 2015,” The NYT said.

The recent raft of upbeat data supports the theory that the Federal Reserve will raise interest rates in September, the Times said, “although market-based forecasting tools suggest lift-off may not occur until late in the year or even in 2016.”