ADP released a report Wednesday that shows the U.S. private sector added 281,000 jobs in June, increasing expectations for Thursday's jobs report.
U.S. businesses went on a hiring spree in June, adding the highest number of jobs since 2012, according to national payroll processor Automatic Data Processing and Moody Analytics. The report, which is issued days before the Labor Department releases its jobs report, exceeded analyst expectations with economists surveyed by the Wall Street Journal estimating an increase of 210,000 jobs in June.
"It all points to a relatively optimistic outlook," said Lewis Alexander, U.S. chief economist for Nomura Holdings in New York. "Businesses are seeing demand and the fact that they're hiring supports that."
June's numbers are a big jump from May, when ADP predicted a 179,000 increase in private sector jobs.
Economists expect the Labor Department's report to indicate a 218,000 increase in non-farm payrolls, close to the 217,000 added in May, and for the unemployment rate to hold steady at 6.3 percent. Forecasters might decide to review their estimates after the release of the ADP report but there have been times when the private sector report has missed the target.
The report shows a 230,000 increase in service sector jobs, an addition of 12,000 factory workers and 36,000 new jobs in construction. Companies with 1-49 employees saw the most job additions, with 117,000 new workers last month.
"Job gains are broad-based across all industries and company sizes," said Mark Zandi, chief economist at Moody's Analytics in West Chester, Pennsylvania. "Judging from the job market, the economic recovery remains fully intact and is gaining momentum."