ADP Report: Companies Add Less Jobs than Forecasted
In the United States, companies added fewer new jobs than was forecasted for May. This is just another sign of the uneven progress across the labor market. The ADP report is a private report that is based upon payrolls it processes.
The increase of 179,000 in jobs was the smallest rise in jobs in the past four months and follows a gain of 215,000 for April that was less than what had initially been estimated.
The forecast by economists called for an increase of 210,000 jobs in May. Many companies have confidence in meeting demand without employing many new workers to their headcounts after shrinkage in the economy during the last quarter, which was the first since 2011.
Job growth that is faster propels bigger gains in wages, which would give the consumer the ability to increase spending, which accounts for just over 70% of the entire economy.
Estimates for payroll increases for May by economists ranged from increases of 120,000 to as many as 275,000, following April original increase of more than 220,000.
The goods-producing sector, which includes construction companies and manufacturers increased jobs by 29,000 during May, according to the ADP report today. Construction was up 14,000 and factories climbed 10,000.
Payrolls in the service provider sector were up by more than 150,000.
The companies that have 500 workers or more added just 37,000 new jobs. At the same time, those with between 40 and 499 employees were up 61,000 for the month. The smallest businesses increased their payrolls by more than 82,000.
The report by ADP is based upon data that come from businesses representing over 21 million employees. The data from the Labor Department which is due June 5 might show that private payrolls, which exclude agencies from the government, increased by 210,000 during May, after gain of 273,000 during April.
The policy makers in the Federal Reserve Bank have monitored the progress of the labor market while dialing back their program of bond buying that was aimed at boosting growth in the economy.
Fed Chairwoman Janet Yellen said that the economy needed to move further ahead to be at full health earlier in June.