Private-sector payrolls in America rose by 178K in May, according to new data from ADP. That is a smaller increase than expected and the April gain was revised sharply lower (204K to 163K). As a result, the less volatile 3-month average pace of job creation fell to 180K in May, the first sub-200K reading since November of last year but still well above the pace of job creation needed to keep up with population growth. Under the hood, payrolls jumped by 64K in the goods-producing sector thanks to solid gains in mining, manufacturing, and particularly construction hiring.
Most of the private-sector payrolls added this month, though, were as usual found in the services sector (+114K), and ADP’s Ahu Yildirmaz added that “healthcare and professional services remain a model of consistency and continue to serve as the main drivers of growth in the services sector and the broader labor market as well.” As for small business job creation, payrolls at firms with 1-49 employees rose by 38K in May. That is a bit weaker compared to April but still the 8th monthly gain in a row and equal to more than a fifth of all the private-sector payrolls added to the economy in May. Trouble filling job vacancies has likely exacerbated the recent slowdown in payrolls growth, but Mark Zandi, chief economist of Moody’s Analytics, added that “wage growth is accelerating in response, most notably for young, new entrants and those changing jobs.”
Sources: Econoday, ADPPost author: Charles Couch