According to a report released by ADP on Wednesday, the creation of new private jobs slowed down in May more than anticipated, indicating ongoing weakness in the labor market.
According to the payroll processing company, employers added 152,000 new positions in April, which was less than the 188,000 jobs that were later reduced down and less than the 175,000 jobs that the Dow Jones consensus predicted. Since January, this was the lowest monthly level.
The decline in employment growth coincided with annual pay growth gains being steady at 5%, where they have been for the past three months.
“Job gains and pay growth are slowing going into the second half of the year,” ADP’s chief economist, Nela Richardson, stated. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”
The hiring was primarily from the services sector; only 3,000 net jobs were added from the goods producers.
With 55,000 new employment, trade, transportation, and utilities led the way; 46,000 new positions came from education and health services, and 32,000 from construction.
Leisure and hospitality, a major contributor during the previous few years, experienced a rise of just 12,000 while the other services sector increased 21,000.
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The month saw job losses in a variety of industries.
20,000 jobs were lost in the manufacturing sector, which has been in decline for the most of the last 18 months. Information (-7,000), mining and natural resources (-9,000), and professional and business services (-6,000) were among the other sectors that saw declines.
The number of small businesses employing between 20 and 49 people decreased by 36,000.
The data is released two days before the Bureau of Labor Statistics’ more anticipated nonfarm payrolls count. ADP can occasionally offer a sneak peek of what to expect in the BLS report, however there may be significant differences between the two figures.
The BLS estimate of 167,000 was surpassed by the ADP report, which showed private payroll increase of 188,000 in April.
According to Wall Street economists, nonfarm payrolls increased by 190,000 in May following a 175,000 increase in April. But a number of recent indicators point to a slowdown in hiring.
A BLS report released on Tuesday revealed that job opportunities decreased to slightly over 8 million in April, the lowest amount since February 2021.
