Private sector employers added 133,000 jobs from April to May on a seasonally adjusted basis, according to payroll giant ADP, in the latest sign of tepid employment growth.
ADP also slightly revised downward its employment figures for April from the initially reported 119,000 to a revised estimate of 113,000 (see
The greatest employment gain in May came at small businesses of between one and 49 employees, which added 67,000 jobs. Midsize businesses of between 50 and 499 employees added 57,000 jobs, while large businesses of 500 employees or more added 9,000 jobs. The service sector added 132,000 jobs, while the goods-producing sector increased by only 1,000 jobs.
The financial services sector added 8,000 jobs from April to May. Manufacturing employment declined by 2,000 in May, its second consecutive monthly decline. Construction employment fell by 1,000, the second consecutive decline following six monthly advances, likely driven in part by unusually warm weather during the winter months.
“While May’s increase was the twenty-eighth consecutive monthly advance, it nonetheless reflected a notable slowdown in the recent pace of hiring,” said Joel Prakken, chairman of Macroeconomic Advisers, which compiles the monthly national employment report with ADP. “The sharpness of the deceleration seems consistent with other incoming data suggesting the economy, weighed down by heightened uncertainty over the European financial crisis and by growing concerns about domestic fiscal policy, slowed early in the year.”
Among small businesses, the service sector added 63,000 jobs, while the goods-producing sector added 4,000 jobs.
The U.S. Bureau of Labor Statistics is expected to issue the official job numbers on Friday. Last month, the unemployment rate declined a tenth of a percentage point to 8.1 percent, even though employers added only 115,000 jobs in April (see
The unemployment decrease was attributed to a large number of discouraged people dropping out of the labor force after not finding work for over a year.
“The modest rise in private employment suggests that the national unemployment rate probably did not decline in May unless the labor force continued to decline,” said Prakken. “Hence, today’s estimate, especially if reinforced by a weak reading on employment from the Bureau of Labor Statistics on Friday, likely will fuel concern that the economy is slowing fundamentally for the third summer in a row.”
