Private sector job growth slows down in May, falling short of expectations
- Private payrolls growth slowed to 152,000 in May, much less than the anticipated figures.
- The job creation by private U.S. companies came in below expectations, indicating a slowdown in the labor market.
- ADP's report suggests further sluggishness in private sector employment growth.
Companies added fewer jobs in May compared to April. Trade, transportation, and utilities sectors created the most jobs, followed by education, health services, and construction. However, some sectors like manufacturing and natural resources lost jobs. The labor market is slowing down, with job gains and pay growth decreasing as we move into the second half of the year. Private job creation slowed more than expected in May, indicating further sluggishness in the labor market. The Chief Economist at ADP mentioned that job gains and pay growth are slowing down. The report also highlighted that manufacturing, natural resources, mining, information, and professional services sectors saw job losses. The report from ADP precedes the more anticipated nonfarm payrolls count from the Bureau of Labor Statistics. While ADP's report in April showed higher job growth than the BLS count, recent indicators suggest a slowdown in hiring. The data indicates that the labor market is cooling down due to higher interest rates. The report showed that companies added 152,000 jobs in May, below expectations. Wage growth remained steady at 5% for the third consecutive month. The services sector saw the most job growth, while goods producers contributed minimally. The upcoming jobs report from the Labor Department is expected to show a slight increase in hiring, with the unemployment rate remaining steady.