Each month, payroll provider ADP releases its national employment report, which focuses on the number of private-sector employment increases that have been made over the last 30 days. With the unemployment rate still hovering below 4%, what were ADP’s findings about hiring in the month of May?
ADP has reported that private-sector employment has increased, yet the number of new jobs dropped significantly compared with previous months. In April 2019, we reported that private sector employment had increased by 129,000 jobs from February to March. But for the April/May report, new job openings drastically decreased to just 27,000.
“Following an overly strong April, May marked the smallest gain since the expansion began,” says Ahu Yildirmaz, Vice President and Cohead of the ADP Research Institute—in a press release. “Large companies continue to remain strong as they are better equipped to compete for labor in a tight labor market.”
When you break the numbers down by employer size, small businesses—employers with 49 or fewer employees—actually saw a decrease, of 52,000 jobs. But, for medium-sized businesses—employers that have between 50 to 499 employees—11,000 new jobs became available. And for large businesses—employers who have over 500 employees—the number dramatically increases to 68,000 new open positions.
When broken down by sector, the goods-producing sector decreased by 43,000 jobs, with the largest decrease being in the construction industry, where jobs decreased by 36,000. Meanwhile, the service-producing sector saw the largest increase, with 71,000 new jobs. The healthcare/social assistance industry—which ADP groups into the service-producing sector—saw the largest increase in this area, with 34,000 jobs.
“Job growth is moderating,” says Mark Zandi, Chief Economist of Moody’s Analytics. “Labor shortages are impeding job growth, particularly at small companies, and layoffs at brick-and-mortar retailers are hurting.”
The ADP findings are lower than what the Bureau of Labor Statistics (BLS) is reporting in its May Employment Situation Summary. The May report found that 75,000 jobs were added last month, which is less than what experts were predicting. We’ll cover the full BLS report in tomorrow’s post.
The ADP National Employment Report is derived from ADP payroll data representing 411,000 U.S. clients and nearly 24 million workers, and is published in collaboration with Moody’s Analytics. For more information about this report, click here.