WASHINGTON (REUTERS) - US private payrolls increased more than expected in June and fewer Americans applied for unemployment benefits last week, suggesting a rebound in job growth after May's paltry gains.
Thursday's reports underscored the economy's strength and supported views that the United States would weather the impact of last month's British referendum to leave the European Union.
"The labour market is tight, there are plenty of job openings, firms are holding onto labour, and the main factor restraining job growth is a skills mismatch between available workers and the needs of employers," said John Ryding, chief economist at RDQ Economics in New York.
The ADP National Employment Report showed private employers hired 172,000 workers in June, beating market expectations for a 159,000 gain. Private payrolls rose 168,000 in May. The ADP report, which is jointly developed with Moody's Analytics, was published ahead of the government's more comprehensive employment report for June scheduled for release on Friday.
Job growth in June is expected to get a boost from 35,100 Verizon workers who were excluded from the nonfarm payrolls count in May while on a month-long strike.
In a separate report, the Labour Department said initial claims for state unemployment benefits declined 16,000 to a seasonally adjusted 254,000 for the week ended July 2.
The drop left claims close to a 43-year low of 248,000 touched in mid-April. Economists polled by Reuters had forecast initial claims rising to 270,000 in the latest week.
Claims have now been below 300,000, a threshold associated with a healthy labour market, for 70 straight weeks, the longest stretch since 1973. The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 2,500 to 264,750 last week.
Claims were low through June, backing views that May's weak payroll gains were not a true reflection of the labour market.
The claims report showed the number of people still receiving benefits after an initial week of aid dropped 44,000 to 2.12 million in the week ended June 25. The four-week average of the so-called continuing claims rose 3,000 to 2.15 million.