Business

Surge in US private sector hiring

WASHINGTON: Private US companies hired at a blistering pace last month, accelerating from the pause in April back to the trend of the past six months, payroll firm ADP reported yesterday.

With only two sectors showing declines, non-farm private employment surged 253,000 last month, nearly identical to the gain in March.

That far surpassed the consensus forecast among analysts, who were looking for an increase of just 180,000, in line with the more modest increase in hiring seen in the April ADP data.

The report, which covers 411,000 firms and 24 million workers, comes before today's closely-watched US employment data release, although the reports can diverge widely.

Prior to the ADP release, analysts were forecasting a gain of 172,000 in the private employment component of the official data. In April, the Labor Department reported an increase of 194,000 private payrolls, compared to the 174,000 in the ADP.

Mr Mark Zandi, chief economist of Moody's Analytics, said: "Job growth is rip-roaring. The current pace of job growth is nearly three times the rate necessary to absorb growth in the labour force."

Echoing the Federal Reserve's own survey, Mr Zandi said: "Increasingly, businesses' number one challenge will be a shortage of labour."

The Fed's last two beige book surveys have noted increasing reports of companies across the country having trouble filling positions and retaining workers, and resorting to better pay and benefits packages.

Services once again accounted for the vast majority of the gain reported by ADP, but it was the rebound in the goods producing industries from a virtual halt in April that pushed the total back to its trend pace.

Services firms added 205,000 jobs, including 88,000 in professional and business services, which was the biggest monthly gain since 2014. - AFP

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