In a sign that hiring may be slowing down, U.S. businesses added just 152,000 new jobs in May, marking the smallest increase this year, according to payroll giant ADP.
Economists had forecast a higher figure of 175,000.
“Job gains and pay growth are slowing going into the second half of the year,” said ADP’s chief economist Nela Richardson. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”
The bulk of new jobs came from health care and education, two sectors that are less dependent on broader economic trends than others. These are sometimes called “government-adjacent” sectors.
There was, however, a lot of strength in trade and shipping and construction, two parts of the labor market that often indicate economic trends. Trade, transportation and utilities added 55,000 jobs and construction added 32,000.
Financial services also added jobs in May, with payrolls growing by 28,000 Information, manufacturing, professional services, and mining all shed jobs.
Revised figures showed that job gains in April were slightly reduced to 188,000.
ADP said workers who stayed in their jobs received a 5 percent pay increase over the past year, unchanged for three months. Meanwhile, job switchers saw a 7.8% percent pay bump, although this figure has been falling and is expected to continue its decline. Two years ago, job switchers enjoyed a peak increase of 16.4 percent.
ADP report tracks only private-sector hiring. It is not intended to predict the official jobs report due out on Friday. Instead, ADP says it is an independent measure of the labor market.
Economists expect the Labor Department to say the economy added 195,000 jobs in May, an increase from April’s 175,000.
In a separate report Tuesday, the Labor Dept. said job openings fell to 8.1 million, missing expectations and a sharp decline from the prior month’s 8.4 million.
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