America's private sector employers added 692,000 jobs in June, according to Wednesday's ADP Employment Report. That exceeded Wall Street analysts' expectations.
While employers complain that they can't find enough workers, the battered leisure and hospitality industry still registered by far the most job growth at 332,000 new positions -- accounting for nearly half of June's overall job gains.
So what gives?
It's all down to a timing mismatch, said ADP chief economist Nela Richardson.
"Everyone is hiring at once to position for the summer reopening," which means strong competition to find staff, Richardson told CNN Business during a conference call.
The demand for hospitality workers is still surging, "but on the supply side you're seeing frictions like child care and health risks," Richardson said.
At the same time, the industry is still recovering from last year's lockdown shock, which means this might not have been the last month of outsized job gains.
"All in all this is a solid report, but frictions are still present that may hold back even stronger gains," Richardson said.
The gains were spread evenly across small, medium-sized and large businesses, but hiring remains a challenge across the board.
Even though the ADP jobs report is a good indicator for the state of the labor market, it does not always serve a a predictor of the government's monthly jobs tally, which is due Friday at 8:30 am ET. Economists polled by Refintiv expect 700,000 jobs were added in June.