- Ward McCarthy, chief financial economist at Jefferies
US private employers created more jobs than expected in June, indicating further improvement in the labour market, which may justify US interest rate hike later this year. According to the payroll firm ADP, US private sector added 237,000, following the revised 203,000 in May and overshooting economists' expectations for an upturn to 218,000. The ADP figures are released prior to the US Labor Department's more comprehensive non-farm payrolls report on Thursday, which includes both public and private-sector employment. Economists predict total US employment to have increased by 230,000 jobs in June, down from May's 280,000 gain. The unemployment rate was expected to slide to the lowest level in seven years of 5.4% from 5.5%.
Separately, US manufacturing growth accelerated in June, as the ISM manufacturing PMI rose to 53.5 in the reported month, up from 52.8 in May. The ISM report showed factory orders and employment in June stood at their highest levels since December 2014. The employment indicator rose to 55.5 from 51.7, adding to signs that many companies expect additional orders in the coming months and are hiring in advance. The measure of new orders edged up slightly to 56 from 55.8. Manufacturing growth has accelerated in the past two months, a sign US factories have begun to adapt and overcome hurdles caused by a stronger US Dollar and lower oil prices.
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