Job growth in the private sector climbs by 37,000 in May, maintaining a steady wage increase of 4.5%
Alright, let's dive into the recent private sector job market report from ADP. Things took a turn for the worse in May, with only 37,000 jobs added, as per the latest ADP National Employment Report. That's a steep drop compared to the growth we've seen earlier this year.
Dr. Nela Richardson, the Chief Economist at ADP, summed it up pretty well: "Hiring is losing momentum." Yet, there's a silver lining - annual pay grew by a robust 4.5% compared to the same period last year.
The goods-producing sector took a hit, with a 2,000-job decline, mainly due to losses in natural resources and manufacturing. However, the construction sector managed to add 6,000 jobs. Service-providing industries, on the other hand, gained 36,000 positions, with leisure and hospitality, financial activities, and information services leading the way. But it wasn't all good news, as we saw losses in professional and business services and education and health services.
Geographically speaking, the West saw the most growth, while the Northeast suffered a loss of 19,000 jobs, mainly from New England. The South also saw a decline of 5,000 jobs, with the West South Central subregion bearing the brunt of the loss (-44,000).
Employment by establishment size was a mixed bag. Medium-sized businesses added 49,000 jobs, but small businesses saw a loss of 13,000, and large firms shed 3,000 jobs.
In terms of pay, workers who stuck with their jobs saw a 4.5% annual growth, while those who switched jobs enjoyed a 7.0% increase—unchanged from April. Job-stayers in financial activities saw the highest year-over-year pay increase at 5.2%, followed by leisure and hospitality at 4.8%. Medium and large companies offered the strongest wage growth, at 4.8% and 4.9% respectively.
The report is based on payroll data from over 25 million U.S. employees. Previously reported job growth for April was revised downward from 62,000 to 60,000.
For more detailed employment and wage data, check out www.adpemploymentreport.com.
Now, if we're talking about May 2023 (which the question seems to reference), the reasons for the slowdown would likely be economic uncertainty, tighter credit, and slower consumer demand. But the specific report for May 2023 isn't detailed in the results.
For May 2025, the factors contributing to the slowdown were different, but share some similarities: employment declines in factory and service sectors, significant negative job growth among small establishments, overall cautious hiring practices due to uncertainties in the economic outlook and higher interest rates, and unexpectedly weak hiring figures compared to expectations.
- The financial activities sector, as part of the service-providing industries, showed growth by adding jobs in May, but it was also one of the sectors that witnessed losses in terms of job-switchers.
- In the analysis of employment by establishment size, it was observed that while medium-sized businesses added jobs, small businesses suffered a loss, posing a challenge in the broader business sector.
