May 2023 Layoffs Jump on Tech, Retail, Auto; YTD Hiring Lowest Since 2016

Private sector employment increased by 278,000 jobs in May and annual pay was up 6.5 percent year-over-year, according to the May ADP® National Employment Report™ produced by the ADP Research Institute® in collaboration with the Stanford Digital Economy Lab ("Stanford Lab"). The jobs report and pay insights use ADP's fine-grained anonymized and aggregated payroll data of over 25 million U.S. employees to provide a representative picture of the labor market. The report details the current month's total private employment change, and weekly job data from the previous month. ADP's pay measure uniquely captures the earnings of a cohort of almost 10 million employees over a 12-month period. "This is the second month we've seen a full percentage point decline in pay growth for job changers," said Nela Richardson, chief economist, ADP. "Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring." tweet at 8:17am: ADP Report: Wage-Driven Inflation May Be Less Of A Concern For Economy Despite Robust HiringPrivate payrolls rose by 278,000 in May, well ahead of expectations, ADP says The U.S. labor market posted another month of surprising strength in May as companies added jobs at a pace well above expectations, according to a report Thursday from payroll processing firm ADP. Private sector employment increased by a seasonally adjusted 278,000 for the month, ahead of the Dow Jones estimate for 180,000 and a bit lower than the downwardly revised 291,000 in April. May’s increase took the payroll growth so far in 2023 to 1.09 million. The ADP report noted that the distribution of job grains was “fragmented” for the month, as increases were concentrated in leisure and hospitality, which added 208,000 positions, and natural resources and mining, which saw a gain of 94,000. Construction added 64,000 jobs, but multiple other categories saw declines. For instance, manufacturing saw a drop of 48,000, financial activities lost 35,000 and education and health services was off by 29,000. Trade, transportation and utilities posted an increase of 32,000 while the other services category added 12,000. From a size perspective, companies with 500 or more workers lost 106,000 jobs. Small firms, with fewer than 50 workers, added 235,000 positions. One area of note for ADP was a slowdown in the pace of wage gains, with annual pay up a still-robust 6.5% in May but down from the 6.7% increase in April. Those switching jobs reported an annual increase of 12.1%, off a percentage point from the month before.