According to ADP, May saw the slowest rate of pandemic recovery at work in terms of job creation.
Only 128,000 private sector jobs increased in the month. That’s a very small increase from the Dow Jones estimate of 299,000 and is a significant decline from the revised 202,000 April report.
This was the most severe month since April 2020’s massive layoffs, which saw more than 19,000,000 workers being sent home by companies. Covid outbreakThis triggered an economic shut down.
By ADP’s count — which usually differs somewhat from government figures — payrolls had increased by nearly 500,000 a month over the past year.
The slowdown in May hiring is due to fears of a broader economic pullback. The inflation rate is at its highest point in over 40 years. ongoing war in UkraineFears that the U.S. might be in recession have been fueled by a Covid-induced shut down of China.
The biggest impact on small businesses was due to the fact that companies with fewer than 50 employees saw their payrolls drop by 91,000. 78,000 were laid off by businesses employing fewer than 20 people.
Nela Richardson ADP’s chief economist said that monthly job growth is closer to pre-pandemic levels due to tight labor markets and higher inflation. The job growth rate for hiring has been moderate across industries. However, small businesses are still a concern because they have difficulty keeping up with large firms which have been growing rapidly in recent years.
According to other economic data, Thursday’s initial claims for unemployment during the week ending May 28 were 200,000. That is 11,000 less than the previous week but still below the 210,000 estimation. according to the Labor Department.
Continued claims were at 1.31 Million, which was the lowest number since Dec. 27, 1970. It is a sign that, while hiring is slowing down, layoffs are not taking place.
Also, first-quarter productivityAlthough the revision was slightly higher, it still indicated a decrease of 7.3%. This is the largest fall since 1947. According to Bureau of Labor Statistics, this was the largest increase in unit labor costs since 1982’s third quarter.
In leisure and tourism, which was most affected by restrictions but has been an important leader in recovery efforts, there were the biggest changes in ADP. Only 17,000 people were hired in May, as summer tourism season kicks off.
Growth in education and health was the largest sector with 46,000. Next came professional and business with 23,000, and then manufacturing with 22,000. Good producers saw a 24,000 increase in service-providing job growth, and 104,000 more overall.
Payroll gains for companies with more than 500 workers were the most impressive, with 122,000 payroll increases. Midsize businesses contributed 97,000.
This report is issued the day before BLS releases its closely watched nonfarm payrolls counts count. It will show an expected gain of 328,000 after April’s 428,000. It is expected that the unemployment rate will drop to 3.5% by June, which would make it tie for lowest since December 1969.
BLS counts government jobs. This is different from ADP which includes private payrolls.
