Private job creation slowed more than expected in May, an ADP report said on Wednesday, pointing to further slack in the labor market.
The payroll company said companies added 152,000 jobs this month, less than the downwardly revised 188,000 in April and below the Dow Jones consensus estimate of 175,000. This was the lowest monthly value since January.
Along with slowing job creation, annual wage growth gains have remained at 5% for three straight months.
“Employment gains and wage growth slow in the second half of the year,” said ADP chief economist Nela Richardson. “The labor market is solid, but we are seeing significant vulnerabilities among both producers and consumers.”
Almost all new hires came from the service sector, with goods producers contributing only 3,000 net to the total.
Trade, transportation and utilities led the way with 55,000 new jobs, while education and healthcare added 46,000 and construction contributed 32,000. The other services category added 21,000, but leisure and hospitality, a major contributor in recent years, only saw an increase of 12,000.
There were job losses in several industries this month.
Manufacturing, which has contracted for much of the past year and a half, lost 20,000 jobs. Further declines were recorded in natural resources and mining (-9,000), information (-7,000) and professional and business services (-6,000). Small businesses also saw a decline: companies with 20 to 49 employees fell by 36,000.
The report comes two days before the Bureau of Labor Statistics’ more closely watched nonfarm payrolls report. ADP can sometimes provide a preview of upcoming events in the BLS report, although the two items can sometimes differ significantly. The ADP report notes that April saw private payroll growth of 188,000, higher than the BLS figure of 167,000.
Wall Street economists expect nonfarm payrolls rose by 190,000 in May, after rising by 175,000 the previous month. However, several indicators have recently pointed to a slowdown in hiring, and a BLS report on Tuesday showed job openings fell to just over 8 million in April, the lowest level since February 2021.
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2024-06-05 12:52:50
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