Data released on Wednesday by Automatic Data Processing Inc (ADP) showed seasonally adjusted private sector employment growth of 98,000 in June. This figure is lower than the 122,000 recorded in May, which was not revised, and slightly misses the Dow Jones consensus estimate of 110,000.

Nearly half of the job gains in June—48,000—originated from the education and health services sector, which has consistently been a steady leader in employment growth. With the exception of 2,000 positions, all of the net new jobs were created within the service-providing sector.

Other industries that saw increases included trade, transportation, and utilities (15,000), financial activities (14,000), and other services (8,000). The natural resources and mining sector was the only one to contract, shedding 5,000 jobs. The leisure and hospitality industry added a mere 2,000 positions, continuing its weak performance this year. This sector is often viewed as a gauge for underlying consumer demand.

Nela Richardson, chief economist at ADP, commented, "The pace of hiring reflects a supply-and-demand dynamic that warrants attention. We know it's taking job seekers longer to find work, but there are also signs of labor supply tightness in certain sectors. For now, the net effect is a slower pace of job growth."

The annual pay increase for job stayers held steady at 4.4%, while the pay gain for job changers saw a modest uptick to 6.6%.

Employment growth was skewed towards smaller businesses. Firms with fewer than 50 employees added 53,000 workers. Companies with 500 or more employees added 25,000, and medium-sized businesses contributed 29,000 new jobs.

The ADP report serves as a precursor to the more closely watched nonfarm payrolls data from the Bureau of Labor Statistics, due on Thursday. In recent months, the ADP figures have generally trailed the official government reports, which have indicated overall robust employment growth this year.

Market consensus anticipates the addition of 115,000 nonfarm jobs in June, with the unemployment rate expected to hold steady at 4.3%. Average hourly earnings are forecast to rise 0.3% month-over-month and 3.5% year-over-year.