ADP’s Employment Report showed that private payrolls rose less than expected in May, as employers added 152,000 new jobs versus the 175,000 that had been forecasted. Job growth in April was also revised lower by 4,000 jobs. Nearly all the gains came from service-providing sectors (+149,000), with goods producers only adding 3,000 jobs due to a slowdown in manufacturing and mining.
Small businesses also continue to feel the pinch, as those with fewer than 50 employees reported 10,000 job losses. This is compared to 177,000 new jobs added among medium and large companies combined.
Annual pay gains decelerated for job changers, with ADP reporting an average increase of 7.8% in May versus 9.3% in April. Job stayers saw an average increase of 5% for the third month in a row.
What’s the bottom line? “Job gains and pay growth are slowing going into the second half of the year,” said Nela Richardson, chief economist, ADP. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”
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