Private job creation slowed more than expected in May, according to a report Wednesday from ADP that signals further sluggishness in the labor market. The payroll processing firm said that companies added 152,000 jobs on the month, fewer than the downwardly revised 188,000 in April and below the Dow Jones consensus estimate for 175,000. This was the lowest monthly level since January. Along with the slowdown in job creation, annual pay growth gains held at a 5% rate, where they have been for three months running.
“Job gains and pay growth are slowing going into the second half of the year,” ADP’s chief economist, Nela Richardson, said. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.” Nearly all the hiring came from the services sector, with goods producers contributing just a net 3,000 to the total. Trade, transportation and utilities led with 55,000 new jobs, while education and health services added 46,000, and construction contributed 32,000. The other services category added 21,000, but leisure and hospitality, a leading contributor over the past several years, saw a gain of just 12,000.
Source: CNBC