Hiring improved slightly in May, with private sector employers adding 173,000 new jobs, a gain of 7,000 jobs over April’s revised numbers.
ADP’s National Employment Report released this morning was in line with forecasts. Economists surveyed by Dow Jones predicted, on average, a gain of 170,000 jobs. The initial report for April was increased from 156,000 to 166,000.
Mark Zandi, chief economist of Moody’s Analytics which partners with ADP on the report, said, “Job growth has moderated this spring as energy companies and manufacturers shed jobs. Retailers are also more circumspect in their hiring. Despite the recent slowdown, job growth remains strong enough to reduce underemployment.”
Using the ADP numbers, which do not include any government employment, employers have increased hiring by 188,000 jobs a month since January. That compares to 200,000 average monthly new jobs for the same period last year.
Hiring by small employers was again the strongest. Employers with fewer than 50 workers added a net of 76,000 new jobs. Mid-size employers (50-499 workers) added 63,000, while those larger added 34,000 new jobs.
By sector, ADP reported:
- Construction 13,000
- Manufacturing -3,000
- Trade/transportation/utilities 28,000
- Financial activities 13,000
- Professional/business services 43,000
Labor report due tomorrow
The Department of Labor will release the government’s initial employment report for May tomorrow. A Marketwatch survey of labor economists puts their average forecast at 155,000 new nonfarm jobs. Last month’s strike by 35,000 Verizon workers will temper the report from the Bureau of Labor statistics, negatively impacting hiring gains. The ADP report was not affected by the strike.
Friday’s jobs numbers will be the last before the Federal Reserve Board of Governors meets in mid-June to consider whether to raise interest rates. If the data shows what economists expect — weak hiring and no change in the unemployment rate — it will further fuzz an already murky economic picture. Yesterday, the Fed’s periodic report on economic conditions — the so-called Beige Book — declared, “Employment grew modestly since the last report, but tight labor markets were widely noted in most Districts.”
Yet another report, The Conference Board’s monthly count of online job postings, showed a sharp decline in the number of advertised openings. The Board’s Help Wanted On-Line series showed 285,800 fewer listings in May than in April. Since reaching a high of 5.7 million advertised openings in November, the count has dropped by 800,000 jobs.
“The large May loss continues a pattern of weak employer demand in 2016,” said Gad Levanon, Chief Economist, North America, at The Conference Board. “Following relatively slow growth in 2014 and 2015, we are now seeing some clear signs of softness in labor demand in recent months.”
SHRM: Recruiting getting easier
Meanwhile, SHRM’s LINE report predicts hiring in June will be “healthy” for both manufacturing and service sector employers, though the former will be done from June 2015. SHRM’s report also contrasted with the Federal Reserve’s observations regarding hiring. The LINE report said recruiting was easier in May compared to the year before. “This was the third consecutive month that recruiting difficulty declined in both sectors when compared with the previous year,” SHRM said.