WASHINGTON/NEW YORK -- U.S. private employers stepped up hiring in June and the number of Americans filing new claims for jobless benefits last week fell by the most in two months, hopeful signs for the struggling labor market.
But dark clouds continue to gather over the U.S. economy, with the vast services sector crawling forward at its slowest pace in nearly 2 1/2 years in June and retailers reporting sales below expectations, other data showed Thursday.
The economy has been hit by turbulence from Europe's debt crisis and fears of tax increases at home next year, undermining confidence among businesses and ordinary Americans.
In a sign of growing concern the world economy is deteriorating, China, Britain, and the euro zone all loosened monetary policy in quick succession earlier Thursday.
The day's data showed the U.S. economy has not fully lost steam, but it is not significantly accelerating either, said Anthony Chan, Chase Wealth Management's chief economist. "We are still looking at an economy that is growing, and if labor market conditions continue to improve, that's likely to give consumers the wherewithal to give the U.S. economy a second wind in the second half of the year," he said.
U.S. private employers added 176,000 workers to payrolls last month, the ADP National Employment Report showed, after increasing 136,000 in May. The government will release its closely watched employment report for June today.
ADP has a poor track record of predicting nonfarm payrolls. According to Barclays, its figures have differed from government numbers by an average 50,000 jobs per month this year. Still, the report was a welcome sign for the labor market.
Initial claims for state jobless benefits dropped 14,000 to a seasonally adjusted 374,000 last week, the Labor Department said in a separate report. The four-week average for new claims, a better measure of market trends, fell 1,500 to 385,750.
A separate report showed the number of planned layoffs at U.S. firms fell in June to the lowest level in a year. Employers announced 37,551 planned job cuts last month, down from 61,887 in May, consultants Challenger, Gray & Christmas said.
While the labor market picture is not deteriorating in the face of growing uncertainty, other parts of the economy are slowing significantly.
The pace of growth in the services sector eased in June to its slowest since January, 2010, as orders, including exports, fell, a fourth report showed.
High unemployment and anxiety about the economy weighed on sales at some top U.S. retailers last month, raising concerns shoppers are returning to penny-pinching.
Costco Wholesale Corp., Macy's Inc., Kohl's Corp., and Target Corp. were among the chains that reported disappointing June sales at stores open at least a year.