128,000 private jobs created in May, much less than expected (ADP)

128,000 private jobs created in May, much less than expected (ADP)

Washington (awp/afp) – Private sector companies in the United States added 128,000 jobs in May, nearly half the number in April, as the economy slows and small businesses are particularly struggling to recruit, according to the monthly survey of the business services company ADP published Thursday.

“In a context of a tight labor market and high inflation, monthly job creation is approaching pre-pandemic levels,” said Nela Richardson, chief economist at ADP, in a statement, adding that “the growth rate of hiring has slowed in all sectors.”

Analysts expected 295,000 creations.

In April, moreover, the number of private jobs created was lower than initially announced, at 202,000 instead of 247,000.

In detail, in May, the largest companies are those which recruited the most, with 122,000 jobs created by structures with 500 employees and more, 97,000 jobs for medium-sized companies. On the other hand, 91,000 jobs were destroyed for companies with fewer than 50 employees.

“Small businesses remain a concern as they struggle to keep up with larger companies that have been hiring (a lot) of late,” said Nela Richardson.

American employers have been facing a labor shortage for months, and to attract candidates, offer better conditions and raise wages, which is easier for large companies. These increases contribute to fueling inflation.

Productivity recorded its biggest drop since 1947 in the first quarter of 2022, -7.3% year on year, according to the Labor Department’s second estimate, also released on Thursday. The unit labor cost, for its part, experienced an unprecedented jump since 1982 (+12.6%).

As for layoffs, they remain at a low level, with 200,000 weekly jobless claims at the end of May, according to data from the Labor Department released Thursday. The number of recipients of unemployment benefit even fell, between May 15 and May 21, to its lowest level since December 1969, with 1.3 million people.

“A low level of layoffs as well as a high number of vacancies signal that the demand for labor remains strong, a trend that should persist in the very short term”, commented Rubeela Farooqi, Chief Economist for High Frequency Economics.

Official employment figures for May will be released Friday by the Labor Department. The jobless rate is expected, by consensus of analysts, to fall to 3.5%, its pre-pandemic level and the lowest since 1969.

In April, 428,000 jobs had been created by the American economy, and the unemployment rate had remained at 3.6%.

But inflation could cause unemployment to rise again, and slow economic growth, or even trigger a recession. Because to curb this price increase, one of the main measures is to slow down demand from consumers and businesses.

afp/rp

Comments

0 comments

Leave a Comment

Your email address will not be published.