ADP Employment Increase Eases; Pay Growth Steadies in May
by:Tom Moeller
|in:Economy in Brief
Summary
- Job increase weakest in four months; factory jobs decline.
- Service-sector & construction sector job growth steady & strong.
- Wage growth for “job stayers” steady y/y.
The ADP National Employment Report indicated that nonfarm private sector payrolls rose 152,000 (1.8% y/y) during May after increasing 188,000 in April, revised from 192,000, and a 211,000 March rise, revised from 208,000. It was the weakest increase in four months but higher than the low of a 104,000 gain in November of last year. A 175,000 rise in ADP employment had been expected in the Action Economics Forecast Survey.
Growth in median annual pay for "job stayers" held at 5.0% y/y in May, remaining well below a September 2022 high of 7.8% y/y. Pay increases in manufacturing averaged a 4.7% y/y while leisure & hospitality rose 5.5% y/y. Professional & business services pay grew 4.8% y/y while construction sector rose 5.3 y/y. Pay increases for “job changers” strengthened 7.8% y/y last month, up from a 7.3% y/y low in January, but remained below the 16.4% y/y peak in June 2022.
Small business hiring (less than 50 employees) declined 10,000 (+1.1% y/y) last month after rising 37,000 in April. It was the first decline in six months. Employment at medium-sized firms (50-499,000 employees) rose 79,000 (2.3% y/y) after a 59,000 April increase. It was below the March high of 113,000. Large business hiring (500+ employees) rose 98,000 (2.3% y/y) during May following a 100,000 April gain.
Goods-producing employment edged 3,000 higher last month (1.3% y/y) after a 42,000 April rise. The number of construction sector jobs rose 32,000 (4.1% y/y) following a 31,000 April increase. Hiring in the manufacturing sector fell 20,000 (-0.4% y/y) last month after an 8,000 April gain. Natural resource & mining hiring declined 9,000 (+1.5% y/y) after a 3,000 increase.
Service-producing jobs rose 149,000 (1.9% y/y) in May following a 146,000 April gain. Leisure & hospitality employment rose 12,000 (3.6% y/y) after improving 57,000 and education jobs gained 46,000 (2.9% y/y) following a 27,000 increase. The number of jobs in trade, transportation & utilities increased 55,000 in May (1.1% y/y) following a 26,000 April gain. Professional & business services employment declined 6,000 (+0.5% y/y) after rising 21,000 and information employment fell 7,000 (-0.9% y/y) following a 4,000 April drop.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
More Economy in Brief
