24 x 7 World News

Private payrolls growth slows to 152,000 in May, much less than expected, ADP says

0

A bartender prepares drinks in Le Central restaurant in San Francisco, California, US, on Tuesday, May 7, 2024. 

David Paul Morris | Bloomberg | Getty Images

Private job creation slowed more than expected in May, according to a report Wednesday from ADP that signals further sluggishness in the labor market.

The payroll processing firm said that companies added 152,000 jobs on the month, fewer than the downwardly revised 188,000 in April and below the Dow Jones consensus estimate for 175,000. This was the lowest monthly level since February.

Along with the slowdown in job creation, annual pay growth gains held at a 5% rate, where it has been for three months running.

“Job gains and pay growth are slowing going into the second half of the year,” ADP chief economist Nela Richardson said. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”

Nearly all the hiring came from the services sector, with goods producers contributing just a net 3,000 to the total.

Trade, transportation and utilities led with 55,000 new jobs, while education and health services added 46,000 and construction contributed 32,000. The other services category added 21,000, but leisure and hospitality, a leading contributor over the past several years, saw a gain of just 12,000.

A number of sectors saw job losses on the month.

Manufacturing, which has been in contraction for most of the past year and a half, lost 20,000 jobs. Others seeing decreases included natural resources and mining (-9,000), information (-7,000) and professional and business services (-6,000). Small business also saw a decline, with companies employing between 20 and 49 workers down 36,000.

The report comes two days ahead of the more closely watched nonfarm payrolls count from the Bureau of Labor Statistics. ADP sometimes can provide a preview of what’s ahead in the BLS report, though the two counts can differ, sometimes dramatically. The ADP report showing private payroll growth of 188,000 in April overshot the BLS count of 167,000.

Wall Street economists expect nonfarm payrolls to have expanded by 190,000 in May after growing by 175,000 the previous month. However, a number of indicators of late have shown signs of a slowdown in hiring, and a BLS report Tuesday showed that job openings fell to just over 8 million in April, the lowest level since February 2021.

Leave a Reply