People browse booths at a job fair in Carson, California. (REUTERS/Lucy Nicholson/Files)

Small businesses added 120,000 jobs in June, which was a slight drop from the previous month but another strong showing from Main Street, according to the monthly report by payroll processing firm ADP.

Nationwide, government data released Thursday showed that the economy added 223,000 jobs in June and the unemployment rate dropped to its lowest point in seven years, but analysts said the falling rate likely reflected an exodus of workers from the job market rather than strength in the economy.

In contrast, small business hiring remains a bright spot , said Ahu Yildirmaz, head of the ADP Research Institute.

That’s because some of the factors affecting large employers — such as shifts in global trade and weakness in the energy sector — are not as much of a concern to smaller firms, according to Yildirmaz.

“Overall, the pace at which small businesses are creating jobs is very healthy,” she said.

Companies with fewer than 50 employees accounted for the bulk of the job creation. Those that provide services added 108,000 jobs in June, while goods-producing companies such as construction and manufacturing firms added 12,00 jobs.

Growing consumer confidence and positive growth from the housing market are helping small retailers and construction firms, said Yildirmaz.

Construction spending was up by 0.8 percent in May, while the consumer confidence index rose by 6.8 points in June, according to reports released earlier this week.


Economy adds 223,000 jobs in June; unemployment rate drops to 5.3 percent