A “Help Needed” sign is displayed in a Manhattan store on May 6, 2022 in New York City.
Spencer Platt | Getty Images
Job creation at businesses slowed to the slowest pace of pandemic-era recovery in May, the payroll processing company said Thursday.
Employment in the private sector rose by just 128,000 in the month, well below the Dow Jones estimate of 299,000, and down from the downwardly revised figure of 202,000 in April, which was initially reported as a gain of 247,000.
The massive job drop was the worst month since the mass layoffs in April 2020, when businesses They sent home more than 19 million workers The COVID-19 outbreak has caused a massive economic halt.
According to the ADP tally – which usually differs somewhat from government figures – salaries have increased by about 500,000 per month over the past year.
May slowdown in hiring comes amid Fears of a broader economic downturn. Inflation is hovering around a 40-year high, and The ongoing war in Ukraine And the Covid-induced shutdown in China, which has since been lifted despite the circumstances, has generated fears that the United States could be on the brink of recession.
Small businesses took the biggest hit during the month, with companies employing fewer than 50 workers cutting salaries by 91,000. Of that drop, 78,000 came from layoffs from companies with fewer than 20 employees.
“Against the backdrop of a tight labor market and rising inflation, monthly job gains are close to pre-pandemic levels,” said Nella Richardson, ADP’s chief economist. “The rate of job growth in employment has slowed in all industries, while small businesses remain a concern as they struggle to keep pace with the large companies that have been thriving in recent times.”
The biggest change in the number of ADPs came in the leisure and hospitality sector, the sector most affected by the restrictions and which led throughout the recovery period. May saw only 17,000 set, even with the summer tourism season in full swing.
Education and health services led the two growth sectors, with 46,000, while professional and business services came next with 23,000, and manufacturing added 22,000. Service-providing jobs grew by 104,000, while good producers added 24,000.
Firms with 500 or more workers led with salary gains of 122,000, while midsize firms contributed 97,000.
The report comes a day before the Bureau of Labor Statistics releases its most closely watched nonfarm payroll number, which is expected to show a gain of 328,000 after April of 428,000. The unemployment rate is expected to fall to 3.5%, its lowest level since December 1969.
The BLS count includes government jobs, which is different from the ADP, which is a private payroll statistic.
