WASHINGTON, July 1 (Reuters) - U.S. private payrolls increased less than expected in June, but a sharp decline in planned layoffs pointed to stable labor market conditions last month.

Private employment rose by 98,000 jobs last month after an unrevised 122,000 advance in May, the ADP national employment report showed. Economists polled by Reuters had forecast private employment increasing by 118,000.

The ADP report is jointly developed with the Stanford Digital Economy Lab, and was published ahead of the Bureau of Labor Statistics' more comprehensive and closely watched employment report for June on Thursday. ADP has been a poor gauge of the BLS' private payrolls estimate.

Private payrolls likely increased by 110,000 jobs last month after advancing by 120,000 in May, according to a Reuters survey of economists. With no government increase in government employment anticipated after May's surge, overall nonfarm payrolls were forecast rising 110,000 after increasing 172,000 in May. The unemployment rate is forecast to hold steady at 4.3% for a fourth straight month. 

The labor market has stabilized after stumbling last year. The government reported on Tuesday that there were 1.04 job openings for every unemployed person in May. 

A separate report from global outplacement firm Challenger, Gray and Christmas showed layoffs planned by U.S.-based employers dropped 53% to 45,849 in June. Employers announced 443,604 job cuts in the first half of the year, down 40% compared to the same period last year.

"The pace of layoffs cooled considerably in June, similar to plans last June, and as is typical for summer months," said Andy Challenger, chief revenue officer at Challenger, Gray and Christmas. "That said, the cuts we are seeing remain concentrated in technology, and artificial intelligence continues to reshape how companies think about headcount."

Employers announced plans to hire 10,933 workers in June, down 44% from May. So far this year, companies have announced plans to hire 91,405 workers, up 10% compared to the first half of 2025. Challenger noted that hiring had dropped considerably since 2020. As a result, unemployed people are experiencing difficulties landing new opportunities. 

A Conference Board survey on Tuesday showed the share of consumers viewing jobs as "hard to get" increased in June to the highest level in nearly 5-1/2 years.