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ADP: Small Businesses Continue to Lead Job Creation

The private sector added 179,000 new jobs in May, down from 220,000 the month earlier, according to the latest ADP National Employment Report. Small businesses, however, added 82,000 workers to their payrolls in May, an increase over April’s numbers, which were revised down from 82,000 to 76,000.

The Labor Department will release its latest employment survey on Friday.

The slowdown in overall hiring put a damper on the optimism created around April’s gains. At the time, ADP President and CEO Carlos Rodriguez expressed hope that job growth would continue to accelerate. May’s figures, however, seem to suggest that the economy is still plodding along slowly.

“After a strong post-winter rebound in April, job growth in May slowed somewhat,” said Rodriguez in a statement released Wednesday. “The 179,000 jobs added figure is higher than May of last year and in line with the average over the past twelve months.”

Moody’s Analytics Chief Economist Mark Zandi, who helps prepare the ADP reports, noted that the greatest slowdown occurred in professional and business services companies with 50-999 employees. “The job market has yet to break out from the pace of growth that has prevailed over the last three years,” said Zandi.

The one bright spot appears to be in manufacturing. Manufacturing businesses added 10,000 new workers in May, up from 2,000 in April. This represents the largest job gains recorded by ADP for the manufacturing sector since December of 2013.

However, service businesses continue to grow more quickly than goods-producing companies. Looking at small businesses, service businesses added 73,000 positions in May, according to the report, while goods-producing businesses created 9,000 jobs.

The ADP National Employment Report is derived from ADP’s actual payroll data from nearly 24 million U.S. workers.

Published June 04, 2014

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