Investing.com -- U.S. private payrolls increased at a faster pace in June as policymakers at the Federal Reserve keep a careful eye on the country's labor market ahead of a key upcoming interest rate decision.
Private payrolls rose by 497,000 jobs last month, the ADP National Employment report showed on Thursday, up from a downwardly revised level of 267,000 in May. Economists had expected the reading to tick up by 228,000.
“Consumer-facing service industries had a strong June, aligning to push job creation higher than expected,” said Nela Richardson, chief economist, ADP. “But wage growth continues to ebb in these same industries, and hiring likely is cresting after a late-cycle surge."
The numbers come ahead of the publication of the Labor Department's more comprehensive and closely monitored jobs report for June on Friday. The U.S. economy is expected to have added 225,000 jobs during the month, down from 339,000 in May.
Markets will likely be on the lookout for signs that the jobs market is cooling enough to help tamp down inflationary pressures but is still tight enough to keep unemployment from surging.
According to minutes from the Federal Open Market Committee's most recent meeting, officials noted that a "tight" labor picture and "upside risks" to inflation remained major factors in their outlook for the broader economy. The minutes showed that "almost all" of the Fed officials believed that further borrowing cost hikes may be needed to address these concerns.