Haver Analytics
Haver Analytics
| Jun 01 2023

ADP Employment Remains Strong but Earnings Growth Eases in May

  • Pay increases moderate, notably for “job changers.”
  • Small business employment firms.
  • Natural resource & mining, leisure & construction remain strong.

Nonfarm private sector payrolls increased 278,000 (2.6% y/y) during May after rising 291,000 in April, revised from 296,000. Payrolls rose an unrevised 142,000 in March. A 165,000 May increase was expected in the Action Economics Forecast Survey. The 237,000 average increase during the last three months was the quickest since October.

Growth in median annual pay for "job stayers" eased to 6.5% y/y last month from 6.7% in April and remained below a September high of 7.8% y/y. Last month’s earnings increase was led by 8.4% y/y growth in leisure & hospitality earnings, down from 16.9% y/y growth in March 2022. Education & health services pay increased a slightly lessened 7.6%. Financial sector earnings rose 6.7% y/y, down from 7.8% in November while information sector pay rose 5.8% y/y, below the 8.0% peak in June 2022. Factory sector pay rose 5.9% y/y, down from a high of 7.8% in September 2022. Pay increases for “job changers” averaged 12.1% y/y, below the 16.4% peak last June.

Small businesses hiring (1-49 employees) rose 235,000 (1.2% y/y) following a downwardly revised 116,000 April increase. Employment at firms with 50-499 employees rose 140,000 (4.7% y/y), the largest increase in four months. Employment at large-sized firms fell 106,000 (+1.4% y/y) last month following five straight months of increase.

By industry group, goods-producing employment rose 110,000 (2.1% y/y) after two increases of roughly 65,000. Hiring in the natural resource & mining sector surged 94,000 (11.3% y/y) following three months of strong gain. Construction employment strengthened 64,000 (3.0% y/y) following three months of firm increase. Factory sector jobs declined 48,000 (+0.2% y/y), the third consecutive monthly decline.

Service-producing jobs rose 168,000 last month (2.7% y/y) after a little-revised 227,000 April surge. The number of leisure & hospitality jobs jumped 208,000 (9.2% y/y) after rising 153,000 in April. It was the largest increase since June of last year, up from a 52,000 September low. Trade, transportation & utilities payrolls rose 32,000 (1.5% y/y) in May, about as they did in April. Elsewhere, payrolls declined. Financial activities employment fell 35,000 (-1.1% y/y), down for the sixth straight month. Education & health care sector employment weakened 29,000 (+2.3% y/y) after rising 67,000 in April. Information sector jobs declined 15,000 (-0.7% y/y), the fourth decline in the last five months. Professional & business services employment declined 5,000 (+1.5% y/y), the smallest of four consecutive monthly declines.

By Census region, employment in the Northeast improved 197,000 (5.9% y/y) following a 155,000 April gain. Employment in the West increased 134,000 (3.1% y/y) in May, following a 105,000 April increase. Jobs in the Midwest rose 139,000 (3.0% y/y) after rising 112,000. In the South, the number of jobs declined 204,000 (+0.3% y/y), the fourth consecutive monthly decline.

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.

  • 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.

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