U.S. ADP Nonfarm Private Payroll Growth Slows Unexpectedly in May
by:Tom Moeller
|in:Economy in Brief
Summary
- Overall gain is weakest since 2020 recession.
- Services bare brunt of slowdown.
- Small business hiring declines.
Job creation continued to slow considerably last month, according to the ADP National Employment Report. Nonfarm private sector payrolls increased 128,000 (4.2% y/y) during May after a 202,000 April increase, revised from 247,000 reported initially. It was the weakest gain since a decline in April 2020. A 306,000 May rise had been expected in the Action Economics Forecast Survey.
Small-sized payrolls weakened 91,000 (1.6% y/y) last month after a 123,000 April falloff, revised from -120,000. It wa the third decline in the last four months. Large-sized payrolls rose 122,000 (5.3% y/y) after increasing 278,000 in April, revised from 321,000. Medium-sized payrolls increased 97,000 (4.9% y/y) after rising an unrevised 46,000 in April.
Within industry sectors, weakness in payroll growth was widespread. Private services employment rose 104,000 last month (4.3% y/y) after increasing 171,000 during April, revised from 202,000. Leisure & hospitality jobs increased 17,000 (12.4% y/y) after gaining 47,000 in April. It compared to a 237,000 rise this past December. The number of education & health services jobs rose 46,000 (3.0% y/y) after a 60,000 April increase. Professional & business services jobs increased 23,000 (3.8% y/y) following a 41,000 rise. The number of trade, transportation & utilities jobs grew 8,000 in May (2.8% y/y) after a 15,000 April rise. Employment in financial services rose 10,000 in May (1.7% y/y) after rising 7,000 in April. The number of information sector jobs fell 2,000 (+1.7% y/y) in May, the third consecutive month of decline.
Employment in the goods-producing sector improved 24,000 in May (3.9% y/y) following a 31,000 increase. It was the smallest increase since last July. The number of factory sector jobs rose 22,000 (3.3% y/y) following a 15,000 April gain. Construction sector payrolls eased 2,000 (4.5% y/y) after gaining 12,000 in April. Employment in the natural resource & mining sector improved 5,000 (8.5% y/y) after a 4,000 increase.
The Automatic Data Processing Research Institute survey covers 411,000 companies and includes about one-fifth of U.S. private payroll employment. The data are processed by Moody's Analytics Inc., then calibrated and aligned with the BLS establishment survey data. The ADP data cover private sector employment only.
The ADP National Employment Report data can be found in Haver's USECON database. Historical figures date back to 2001 for private employment and the industry breakdown and 2005 for the business size breakout. 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
Global