The US private sector added just 37k jobs in May, sharply below expectations of 120k, according to the ADP report.
Weakness was most apparent in goods-producing sectors, which shed -2k jobs, while service providers managed a modest gain of 36k. By company size, medium-sized businesses led with 49k new jobs, while small firms lost -13k and large firms shed -3k.
Despite the hiring slowdown, wage pressures remained firm. Annual pay growth for job-stayers held steady at 4.5%, while job-changers saw a 7% increase, unchanged from April.
Nela Richardson, ADP’s chief economist, acknowledged the slowdown in hiring but noted that wage pressures have not yet eased meaningfully—suggesting lingering tightness in segments of the labor market even as overall momentum weakens.
