Jobs Created Data Comes In from ADP, At Less Than Half Expected
Private-sector payroll numbers are out this morning from Automatic Data Processing ADP for the month of May, and they look somewhat disappointing: 128K new jobs in the private sector created last month was less than half the 300K expected, with April’s revision -45,000 to 202K.
This seems to represent a new cycle over the past three months now, well off the 500K+ new private-sector jobs we had been seeing previously. In fact, it’s the single-worst month in ADP headline jobs numbers since April 2020, in the early stages of the pandemic.
The breakdown between Goods and Services was relatively normal — 24K and 104K, respectively — but other aspects of monthly jobs numbers do mark a clear shift from what we’d been seeing: Leisure & Hospitality only brought in 17K new positions in the private sector last month, and Trade/Transportation/Utilities came in at just 8K.
We were led by Education/Healthcare at 46K — in some ways a throwback to pre-pandemic job gains — followed by Professional/Business Services at 23K and Manufacturing at 22K. This is actually a good number for Manufacturing, which helps bolster some of the recent goods-producing metrics we’ve seen of late.
Large businesses (over 500 employees) did fine last month: +122K new private-sector jobs, and medium-sized firms (between 50 and 499 employees) was decent at +97K. But it was small companies, which do not have the same ability to offer higher wages, stock options, healthcare benefits, etc. that severely underperformed: -91K jobs were created by companies with fewer than 50 employees in April.
Initial Jobless Claims for last week were again quite solid: 200K, lower than expectations and the upwardly revised 211K from the previous week. Continuing Claims, from a week in arrears, reached a new half-century-plus low: 1.31 million from a downwardly revised 1.34 million the previous week, which itself had been the lowest long-term employment claims number since the late 1960s.
If we’re seeing a decline in monthly employment numbers, they’re not yet showing up here in this weekly data. Which may be considered odd; one might thing week-to-week data points would bring more definition to real-time conditions. Perhaps there are other forces at work, such as new company start-ups from people who’d previously worked for someone else.
The final read on Q1 Productivity improved from its dismal level previously printed, but not by much: -7.3% versus -7.5% last time around is still the worst quarterly read we’ve seen since Harry Truman was president. And related Unit Labor Costs for Q1 continued to rise from the previous release: +12.6% in its final read, beneath the unrevised +11.6% reported last time.
These are not bright spots for the U.S. economy in the first section of 2022: labor costs continues to spike while productivity overall remains negative. Let’s hope for a turnaround in Q2.
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