National Employment Report: U.S. Private-Sector Employment Added 38,000 Jobs in May
Highlights included data that while the service-providing sector gained 48,000 jobs, the goods-producing sector lost 10,000 jobs, and the manufacturing industry lost 9,000 positions. Construction industry employment dropped 8,000 in May (reversing April's higher numbers), and financial services sector jobs dropped 6,000.
Job gains were mainly experienced in small businesses (+27,000) and medium-sized businesses (+30,000), as employment among large businesses (those with 500 or more workers) decreased by 19,000.
"A deceleration in employment, while disappointing, is not entirely surprising," said the report's authors. "In the first quarter, GDP grew at only a 1.8 percent rate and only about 2.25 percent over the last four quarters. This is below most economists' estimate of the economy's potential growth rate and normally would be associated with very weak growth of employment." Eric Green, chief market economist at TD Securities Inc., had a stronger opinion to share. "It is a warning shot across the bow that job growth is also weakening along with the other high frequency numbers," he said in an e-mailed note to clients (source: Bloomberg News story). "The weakness reflects a general slowdown and turn in sentiment that set in with the sharp rise in energy prices, disruptions from Japan, and to a lesser extent risk aversion stemming from the Greek fiasco."
The report was created by Automatic Data Processing, Inc. (ADP) in partnership with Macroeconomic Advisers, LLC. Its key information is derived from payroll data and measures the change in total nonfarm private employment each month.
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