The surge in private sector hiring shows the labor market remains remarkably hot despite the U.S. Federal Reserve's aggressive campaign of 10 consecutive interest rate hikes since March 2022.
The U.S. central bank paused its cycle of interest rate hikes last month to give policymakers more time to assess how these hikes were affecting the U.S. economy, which is showing signs of being in stronger shape than many people were predicting.
497,000 new jobs were added by the private sector last month, according to ADP, more than double the median forecast of economists surveyed by MarketWatch of 220,000.
The leisure and hospitality sector was responsible for 232,000 new jobs, followed by the construction and trade, transportation and utilities sectors.
The dramatic June figure was almost double the figure from last month, when a revised 267,000 new private sector jobs were created.
"Consumer-facing service industries had a strong June, aligning to push job creation higher than expected," ADP chief economist Nela Richardson said in a statement.
Wages grew at a somewhat slower rate last month, recording a year-on-year increase of 6.4%, down from 6.6% in May.
Wage gains also slowed for people who changed jobs, slowing for the 12th straight month to an annual rate of 11.2%.
"Net, private payrolls rose more than expected in June," High Frequency Economics' chief U.S. economist Rubeela Farooqi wrote in a note to clients.
She said that recent public and private sector hiring figures "show the economy is still creating jobs at an elevated pace, signaling demand for labor is still strong."
"We expect payrolls to remain positive for now. But a deceleration is likely as the lagged and cumulative effects of monetary policy filter through more broadly through the economy," she added.