A pedestrian walks by a now hiring sign posted at a gas station in Los Angeles.
ADP said U.S. businesses 98,000 new jobs in June - the smallest increase in three months - but the payroll processor said demand for labor was improving.
"We know it's taking people longer to find work, but there also are signs of labor supply constraints in certain industries. For now, the overall effect is a slowdown in job creation," said Nela Richardson, chief economist at ADP, the U.S.'s largest processor of company payrolls.
Other employment reports also suggest the labor market appears to be coming out of a recent slump - job openings have surged and hiring has picked up this year.
Yet the economy still isn't adding many new jobs each month. What's more, a new survey shows the number of Americans who think jobs are 'hard to get' is at a five-year high.
The Federal Reserve is watching employment closely while it debates whether to change a key U.S. interest rates. Right now Fed officials view the labor market as stable and in little need of support.
ADP is a lead act of sorts for the official U.S. employment report due Thursday, a day early because of the July 4 holiday. Economists predict an 115,000 increase in new jobs in June based on information collected by the Bureau of Labor Statistics.
Big picture: The labor market is on the mend, but it's still a tough time to find a job for anyone who recently lost one.
The good news is, layoffs are low and most people who already have a job don't have much to worry about.
What would help the economy and the labor market is an end to the conflict with Iran and a receding rate of inflation, both of which could spur more companies to hire.
Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were set to decline in Wednesday trading.
-Jeffry Bartash
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(END) Dow Jones Newswires
July 01, 2026 08:26 ET (12:26 GMT)
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