Private Sector Adds 37,000 Jobs in May, Pay Growth Holds Steady at 4.5%

Private sector hiring slowed sharply in May, with just 37,000 jobs added, according to the latest ADP National Employment Report released Wednesday. The monthly data, produced by ADP Research Institute in collaboration with the Stanford Digital Economy Lab, also shows annual pay rose 4.5% compared to the same time last year.

“After a strong start to the year, hiring is losing momentum,” said Dr. Nela Richardson, chief economist at ADP. “Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers.”

The May increase in private employment marks the lowest hiring pace since March 2023. Jobs in the goods-producing sector declined by 2,000, driven by losses in natural resources and manufacturing. Construction was the lone goods sector with growth, adding 6,000 jobs.

Service-providing industries added 36,000 positions, led by leisure and hospitality (+38,000), financial activities (+20,000), and information services (+8,000). Losses were recorded in professional and business services (-17,000) and education and health services (-13,000).

Regionally, the West posted the largest gain (+37,000), while the Northeast recorded a loss of 19,000 jobs, primarily from a 16,000-job drop in New England. The South declined by 5,000 jobs, with steep losses in the West South Central subregion (-44,000).

Employment by establishment size was mixed. Medium-sized businesses (50–249 employees) added 49,000 jobs. Small businesses lost 13,000, and large firms shed 3,000 jobs.

In terms of pay, annual growth for workers who stayed in their jobs held at 4.5%, while those who changed jobs saw a 7.0% increase—unchanged from April. Job-stayers in financial activities saw the highest year-over-year pay increase at 5.2%, followed by leisure and hospitality at 4.8%. Among firm sizes, medium and large companies offered the strongest wage growth, at 4.8% and 4.9%, respectively.

The report is based on aggregated payroll data from over 25 million U.S. employees. April’s previously reported job growth total was revised downward from 62,000 to 60,000.

Additional employment and wage data are available at www.adpemploymentreport.com.

This article, "Private Sector Adds 37,000 Jobs in May, Pay Growth Holds Steady at 4.5%" was first published on Small Business Trends

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