ADP Reports US Added Just 128K Jobs in May at Slowest Pace Since Covid Lockdowns

Private payroll company ADP reported that US jobs grew 128,000 in May 2022, with 91,000 lost jobs among small businesses. The US Labor Department will report its jobs report on Friday. April added downwardly revised 202K with market expectations adding 300K. The tight labor market, rising interest rates and elevated inflation are the main catalysts for weakness

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ADP US May 2022 Employment Report

Job loss was worst among businesses with less than 20 employees, which saw employment fall by 78,000 workers in April, medium businesses and large businesses added 97,000 and 122,000 jobs, according to ADP.

Total U.S. Nonfarm Private Employment: 128,000

By Company Size

  • Small businesses: -91,000 1-19 employees -78,000 20-49 employees -14,000
  • Medium businesses: 97,000 50-499 employees 97,000
  • Large businesses: 122,000 500-999 employees 46,000 1,000+ employees 77,000

In another sign of weakness, ADP revised its estimate for the number of private-payroll jobs added in April to 202,000 from 247,000.

The rate of hiring has “tempered across all industries,” ADP Chief Economist Nela Richardson said in a Wednesday statement, calling small businesses in particular a “source of concern as they struggle to keep up with larger firms that have been booming as of late.”

By Sector

– Goods-producing:     24,000

  • Natural resources/mining     5,000
  • Construction     -2,000
  • Manufacturing     22,000

– Service-providing:     104,000

  • Trade/transportation/utilities     8,000
  • Information     -2,000
  • Financial activities     10,000
  • Professional/business services     23,000
         – Professional/technical services     19,000
         – Management of companies/enterprises     1,000
         – Administrative/support services     4,000
  • Education/health services     46,000
         – Health care/social assistance     41,000
         – Education     5,000
  • Leisure/hospitality     17,000
  • Other services     2,000

* Sum of components may not equal total, due to rounding.

– Franchise Employment**

  • Franchise jobs     26,400
United States ADP Employment Change
United States ADP Employment Change

The ADP count comes two days ahead of the government’s nonfarm payrolls report, which includes government jobs that ADP does not count. The nonfarm payroll estimate for Friday is at 570K

The Fed Chair Powell came out with a more hawkish tone as expected at the last FOMC. Federal Reserve President Powell and other Fed Governors have admitted they are unsure of the path for wages and inflation. The wages data gives us indications of the FOMC plans on rates into 2022.

Estimates for BLS report

The Labor Department is set to release its May jobs report Friday at 8:30 a.m. ET. Here are the main metrics expected:

  • Economists forecast the U.S. added 328,000 jobs last month, down from 428,000 in April.
  • Average hourly earnings gains are expected to hold at 0.4%
  • Headline unemployment rate is forecast to tick lower, to a multi-decade trough of around 3.5%.

About the ADP® National Employment Report™

The ADP® National Employment Report™ is a monthly measure of the change in total U.S. nonfarm private employment derived from actual, anonymous payroll data of client companies served by ADP®, a leading provider of human capital management solutions. The report, which measures nearly 26 million U.S. workers, is produced by the ADP Research Institute®, a specialized group within the company that provides insights around employment trends and workforce strategy, in collaboration with Moody’s Analytics, Inc.

Each month, ADP Research Institute issues the ADP National Employment Report as part of the company’s commitment to adding deeper insights into the U.S. labor market and providing businesses, governments and others with a source of credible and valuable information. The ADP National Employment Report is broadly distributed to the public each month, free of charge.

The data for this report is collected for pay periods that can be interpolated to include the week of the 12th of each month and processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of establishments. Due to this processing, this subset is modified to make it indicative of national employment levels; therefore, the resulting employment changes computed for the ADP National Employment Report are not representative of changes in ADP’s total base of U.S. business clients.

Source: ADP, TradersCommunity Data, BLS

From The TradersCommunity News Desk