U.S. ADP Payroll Increase Slows Further in May
by:Tom Moeller
|in:Economy in Brief
Summary
- Employment declines in factory & several service sectors.
- Wage growth remains moderate.
- Small & large business employment declines.
The ADP National Employment Report indicated that nonfarm private sector payrolls rose 37,000 (1.3% y/y) during May after increasing 60,000 in April, revised from 62,000, and an unrevised 147,000 in March. It was the weakest monthly increase since a decline in March 2023. A 120,000 May rise had been expected in the in the Action Economics Forecast Survey.
Small business hiring (less than 50 employees) fell 13,000 (+0.6% y/y), after rising 29,000 in April. Employment at medium-sized firms (50-499,000 employees) rose 49,000 (1.1% y/y), after rising 28,000 in April. Large business hiring (500+ employees) declined 3,000 (+2.8% y/y) in May, after increasing 7,000 in April.
Goods-producing employment fell 2,000 (+1.3% y/y) in May, following a 28,000 April increase. Manufacturing jobs declined 3,000 (-0.1% y/y), after increasing 3,000 in April. The number of construction sector jobs rose 6,000 (3.0% y/y) last month, following an 18,000 April gain. Natural resources & mining jobs fell 5,000 (+3.6% y/y) in May, after rising 7,000 in April.
The number of service-producing jobs rose 36,000 (1.2% y/y) in May, following a 33,000 April gain. Professional & business services employment fell 17,000 (+0.5% y/y), after edging 1,000 higher in April. Employment in the financial industry rose 20,000 (2.2% y/y) last month, after rising 24,000 April. Leisure and hospitality employment increased 38,000 (3.2% y/y), following a 29,000 April gain. The number of education & health care jobs fell 13,000 (+1.2% y/y) in May, following a 28,000 April fall. Information sector employment rose 8,000 (0.2% y/y) after a decline of 10,000 in April. The number of jobs in trade, transportation & utilities weakened 4,000 (+0.3% y/y) in May, after rising 27,000 (+0.4% y/y) in April. Employment in “other” services rose 4,000 (3.0% y/y), following a 1,000 decline during April.
Growth in median annual pay for "job stayers" held at 4.5% y/y in May. Manufacturing sector pay grew 4.6% y/y, steady with April. Construction sector pay eased to 4.6% y/y from 4.7% y/y. Natural resource & mining sector pay grew an improved 4.5% y/y last month. Financial sector earnings rose a faster 5.2% y/y, while education & health services pay rose a lessened 4.6% y/y. Leisure & hospitality pay increased 4.8% y/y in May. Professional & business service sector pay increased a lessened 4.2% y/y as did trade, transportation & utilities pay, up 4.2% y/y. Information pay rose an improved 4.2% y/y. Median annual pay for “job changers” rose a steady 7.0% y/y in May.
By region, employment in the Northeast fell 19,000 (+1.4% y/y) in May, following an 8,000 decline in April. Employment in the Midwest rose 20,000 (1.5% y/y) after a 33,000 rise in April. In the South, employment weakened 5,000 (+1.0% y/y) in May, after rising 1,000 in April. In the West, employment rose 37,000 (0.8% y/y) last month, after rising 25,000 in April.
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.
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