US Job Growth Shows Signs of Slowdown
According to ADP, a pay processing firm, the private sector added only 37,000 jobs in May. This number falls significantly short of economists’ expectations, which were set at 110,000, and it’s a drop from the revised figure of 60,000 from the previous month. In fact, it marks the lowest job growth since March 2023.
Nera Richardson, ADP’s chief economist, commented, “After a strong start to this year, jobs are losing momentum.” Interestingly, wage growth remained steady in May, maintaining a solid level for those seeking employment.
In April, the private sector had added 62,000 jobs.
When diving into the details, leisure and hospitality led the way, adding 38,000 jobs in May. Financial activities followed with an additional 20,000 positions. Other sectors that saw job additions include information with 8,000, construction with 6,000, and 4,000 in other services.
However, some sectors experienced job losses. Notably, professional and business services lost 17,000 jobs that month, and education and health services saw a decline of 13,000. Additionally, natural resources and mining lost 5,000 jobs, while trade, transportation, and utilities fell by 4,000. Manufacturing also contracted, shedding 3,000 positions.
It’s interesting to note the job dynamics across company sizes: large firms with over 500 employees lost 3,000 jobs, while companies with 50 to 499 employees hired 49,000, and those with fewer than 50 added 13,000 jobs.
In response to these figures, President Trump took to social media, referencing the reports and urging Federal Reserve Chairman Jerome Powell to cut interest rates. He tweeted, “ADP number out!!! Too late. Powell now needs to lower his rate. He’s incredible!!! Europe has dropped 9 times!”
Recently, Trump has criticized Powell, suggesting that the Fed’s chairman is lagging in addressing interest rate adjustments compared to his counterparts abroad.
Interestingly, during a recent meeting, Trump and Powell met for the first time in their second term, but discussions did not touch on monetary policy. The Fed subsequently clarified that Powell’s comments focused on the importance of incoming economic data in determining future policy directions.
ADP’s report was released ahead of the Bureau of Labor Statistics non-farm payroll report expected on Friday, which may show an increase of around 130,000 jobs, a decrease from April’s reported 177,000.
