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Washington (AFP) – Private-sector hiring remained robust in June but slowed slightly from May’s pace, payrolls firm ADP said in a monthly report Thursday.

ADP said the economy continues to add jobs and companies increasingly report trouble finding workers to fill open positions.

Private firms added 177,000 employees last month, just below the consensus forecast, and a bit slower than the 189,000 hired in May, which was 10,000 more than initially reported.

The ADP report is closely scrutinized as it comes ahead of Friday’s all-important government jobs report, although the two reports are not always in line. In fact the official data for May show private employment increased 218,000.

“The labor market continues to march towards full employment,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute. 

The services sector again led the way with 148,000 new hires, with healthcare job growth once again the biggest increase.

But with the economy continuing to add workers, and the unemployment rate at 3.8 percent, the lowest in 18 years, pressure is building on firms. Economists are expecting private employment to increase 192,000 in June.

“Business’ number one problem is finding qualified workers,” said Mark Zandi, chief economist of Moody’s Analytics.

“At the current pace of job growth, if sustained, this problem is set to get much worse. These labor shortages will only intensify across all industries and company sizes,” he said in a statement.

That is likely to fuel wage pressures, which so far have been modest, and add to the already-difficult task facing the Federal Reserve, which has been raising the benchmark lending rate gradually to get ahead of inflation.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said he was lowering his forecast for job growth in the government report due to the ADP data, cutting it to 170,000 from 200,000.

“That’s a bit below the recent trend, 200K, but at this stage it’s just not possible to know if this is a response to the uncertainty triggered by the trade tariffs and ongoing disputes with trading partners, or simply a reflection of diminishing labor supply,” he said in a research note. 

Private companies have reported cutting some jobs as a result of the worsening trade disputes, with thousands more threatened by the exchange of tariffs between the United States and key trading partners, especially the duties imposed on steel and aluminum imports.

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