May Job Boom

May job Bloom
The Buzz

In this buzz: Surprising surge in the U.S. labor market; Job gains surpassing expectations ;Robust private sector growth; ADP report and a bit more…


In a pleasant surprise,
…the U.S. labor market exhibited robust employment growth in May, surpassing expectations. According to a report from ADP, a leading payroll processing firm,
– the private sector added 278,000 jobs, outperforming the estimated 180,000.
Although slightly lower than April’s figure of 291,000, the overall job growth for 2023 reached an impressive 1.09 million.

The ADP report highlighted uneven job gains across sectors.

  • The leisure and hospitality industry saw the highest increase, adding 208,000 positions, followed by
  • natural resources and mining with 94,000 jobs.
  • Meanwhile, manufacturing experienced a decline of 48,000 jobs,
  • financial activities lost 35,000, and
  • education and health services were down by 29,000.

Notably, larger companies faced a job loss of 106,000, whereas small firms added 235,000 positions.

Slowdown in wage growth
A noteworthy trend identified in the ADP report was a slowdown in wage growth.

  • Although annual pay in May grew by a solid 6.5%, it was slightly lower than April’s 6.7% increase.
  • Job changers reported a 12.1% annual increase, indicating a 1% decline from the previous month.
    ❗Despite this, ADP’s chief economist, Nela Richardson, suggested that the significant slowdown in pay growth might ease concerns about wage-driven inflation, even amidst robust hiring.

The ADP report precedes the anticipated nonfarm payrolls report from the Labor Department, expected to show a job growth of 190,000 in May, following April’s increase of 253,000.

❗Despite the Federal Reserve’s efforts to curb inflation and slow down the labor market through interest rate hikes, the job market continues to thrive. The Fed is now assessing the impact of its tightening policies and may consider skipping another rate hike in June.
→ Additionally, a separate report indicated stable initial filings for unemployment benefits, with 232,000 jobless claims for the week ending May 27, slightly below the estimated 235,000, and a modest rise in continuing claims to 1.795 million.


TRENDING ORIGINALS