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Jobs Week continues this morning with private-sector payroll data. Automatic Data Processing (ADP - Free Report) numbers for May came down for the second month in a row to 152K from a downwardly revised 188K for April. This is a drop of -23K private-sector jobs month over month, the steepest drop since January of this year. The Services sector reported a respectable +149K in new non-government jobs, but Goods-producing positions only came in at +3K — less than 20% of total private-sector employment growth for the month.
We see this in the sector breakdown from ADP. Trade/Transportation/Utilities led all private-sector industries with +55K jobs created last month, followed by Education/Healthcare at +46K and Construction at +32K. That seems like a reasonable mix until you look at Manufacturing jobs down -20K, balanced somewhat by white-collar private-sector jobs losses in Information Services at -7K and Professional/Business Services -6K. Leisure/Hospitality, which drove the bus for the post-Covid years, reached a diminutive +12K last month.
Large companies (more than 500 employees) in the private sector did most of the hiring: +98K. Medium-sized firms (between 50-499 workers) filled +79K positions last month. Small businesses, which cannot compete with healthcare and stock market investment incentives of the bigger corporations, lost -10K private-sector jobs in May. Those who stayed at their current companies averaged +5.0% wage gains, while job changers stood to gain +7.8% on average. This is the second-straight month down, and a fairly big drop from +9% for job changers in April.
Twelve-month lows in ADP headlines came in November of last year, at +104K new hires. We appear to be headed this direction again, with two-straight down months in private-sector employment, although we’ve been on a (range-bound) ebb and flow throughout 2024 so far. The consensus estimate for Friday’s non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) from the U.S. is currently +190K. While initial prints among ADP and BLS do not tend to align exactly in real time (it takes a couple months of revisions to hammer this out), ADP’s Chief Economist Nela Richardson suggests we may see a weaker number than 190K for BLS on Friday morning.
After today’s open, we’ll see S&P Services PMI for May. This is expected to match the previous read of 54.8 — well above the 50 threshold determining growth. ISM Services are also out later this morning, expecting to swing back above 50 to 50.7% from 49.4% reported a month ago. We know from today’s ADP figures that Services continue to drive the economy forward. Earlier this week, we saw mixed Manufacturing data, with S&P coming in higher and ISM lower than expected.
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Markets Await ISM Manufacturing PMI Data
Jobs Week continues this morning with private-sector payroll data. Automatic Data Processing (ADP - Free Report) numbers for May came down for the second month in a row to 152K from a downwardly revised 188K for April. This is a drop of -23K private-sector jobs month over month, the steepest drop since January of this year. The Services sector reported a respectable +149K in new non-government jobs, but Goods-producing positions only came in at +3K — less than 20% of total private-sector employment growth for the month.
We see this in the sector breakdown from ADP. Trade/Transportation/Utilities led all private-sector industries with +55K jobs created last month, followed by Education/Healthcare at +46K and Construction at +32K. That seems like a reasonable mix until you look at Manufacturing jobs down -20K, balanced somewhat by white-collar private-sector jobs losses in Information Services at -7K and Professional/Business Services -6K. Leisure/Hospitality, which drove the bus for the post-Covid years, reached a diminutive +12K last month.
Large companies (more than 500 employees) in the private sector did most of the hiring: +98K. Medium-sized firms (between 50-499 workers) filled +79K positions last month. Small businesses, which cannot compete with healthcare and stock market investment incentives of the bigger corporations, lost -10K private-sector jobs in May. Those who stayed at their current companies averaged +5.0% wage gains, while job changers stood to gain +7.8% on average. This is the second-straight month down, and a fairly big drop from +9% for job changers in April.
Twelve-month lows in ADP headlines came in November of last year, at +104K new hires. We appear to be headed this direction again, with two-straight down months in private-sector employment, although we’ve been on a (range-bound) ebb and flow throughout 2024 so far. The consensus estimate for Friday’s non-farm payrolls from the U.S. Bureau of Labor Statistics (BLS) from the U.S. is currently +190K. While initial prints among ADP and BLS do not tend to align exactly in real time (it takes a couple months of revisions to hammer this out), ADP’s Chief Economist Nela Richardson suggests we may see a weaker number than 190K for BLS on Friday morning.
After today’s open, we’ll see S&P Services PMI for May. This is expected to match the previous read of 54.8 — well above the 50 threshold determining growth. ISM Services are also out later this morning, expecting to swing back above 50 to 50.7% from 49.4% reported a month ago. We know from today’s ADP figures that Services continue to drive the economy forward. Earlier this week, we saw mixed Manufacturing data, with S&P coming in higher and ISM lower than expected.