NEW YORK (Reuters) - U.S. private payrolls recorded their largest gain in 1-1/2 years in June as businesses stepped up hiring, reinforcing views the economy has rebounded from its first-quarter slump.
Private employers added 281,000 workers to payrolls, up from 179,000 in May, payrolls processor ADP said on Wednesday. June's gains, which topped economists' expectations for an increase of only 200,000 jobs, was the largest since November 2012.
Coming a day before the release of the government's comprehensive employment report for June, the ADP report increased the likelihood of another month of strong nonfarm payrolls growth, economists said.
"It signals continued strengthening in job creation and increases our confidence that payrolls for June may have posted their fifth consecutive 200,000-plus monthly gain," said John Ryding, chief economist at RDQ Economics in New York.
Nonfarm payrolls probably increased by 212,000 in June after rising 217,000 the prior month, according to a Reuters poll of economists.
The ADP report, which is jointly developed with Moody's Analytics, was the latest indication the decline in economic growth in the first three months of the year was temporary. Gross domestic product contracted at a 2.9 percent annual pace in the first quarter.
Automobile sales surged in June and factories continue to expand at a steady clip. Housing, which has struggled following a run-up in mortgage rates last year, is also showing signs of life.
Prices for U.S. Treasury debt fell on the ADP data, while the dollar rose against a basket of currencies. U.S. stocks were poised to open slightly higher.
Last month, job gains in the private sector were broad-based. Construction payrolls increased 36,000, the biggest gain since February 2006.
Manufacturing added 12,000 jobs. Professional business services employers hired 77,000 workers last month, the most since November 2012.
"Judging from the job market, the economic recovery remains fully intact and is gaining momentum," said Mark Zandi, chief economist at Moody's Analytics in West Chester, Pennsylvania.