ADP says US private sector added 179,00 payrolls in May
Employment growth in the US private sector rose less than forecast in May, raising concern economic expansion is cooling in the second quarter.
Private payrolls last month rose at a seasonally adjusted pace of 179,000, following an April gain of 220,000, the ADP Institute reported today. The figure, which was in line with the 12-month average, missed forecasts calling for 210,000.
Similar to the previous two months, job growth in May was mainly concentrated in the service economy. Service providers added 150,000 payrolls in May, compared to a 197,000 gain the prior month. Employment in professional and business services increased by 46,000, ADP data showed.
Goods-producers added 29,000 payrolls in May, up from a 24,000 pace the previous month. Among goods-producers, job creation was concentrated mainly in the construction sector, which added 14,000 payrolls. The manufacturing sector added 10,000 jobs, after a gain of only 1,000 in April.
“After a strong post-winter rebound in April, job growth in May slowed somewhat,” said ADP president and CEO Carlos Rodrigues in a press release. “The 179,000 jobs added figure is higher than May of last year and in line with the average over the past twelve months.”
Mark Zandi of Moody’s Analytics said, “Job growth moderated in May. The slowing in growth was concentrated in Professional/Business Services and companies with 50-999 employees. The job market has yet to break out from the pace of growth that has prevailed over the last three years.”
Small businesses added 82,000 payrolls in May. Medium-sized enterprises added 61,000 and large firms added 37,000.
The Labor Department will post official nonfarm payroll data Friday. Official data could show US employers added 218,000 payrolls in May, following a gain of 288,000 that was the biggest in more than two years. The unemployment rate is forecast to be unchanged at 6.3 percent.
Average earnings are forecast to rise 0.2 percent, following no growth the prior month. Year-on-year, average earnings are forecast to increase 1.9 percent.
Job growth averaged 238,000 per month between February and April, according to official government data.
The Federal Reserve believes economic recovery will deepen this year, leading to lower unemployment and a steady rise in inflation. Jobs and earnings growth will be relied upon heavily to spur the housing market, which has been under pressure since last summer.
Strong jobs data reinforces the Fed’s plan to gradually reduce its holdings of US Treasuries and mortgage-backed securities. Since December 2013 the Fed has tapered asset purchasing by $40 billion. The central bank is expected to continue that process at the June 17-8 policy meetings in Washington.
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