ADP National Employment Report: 152K Private Jobs Added in May

The economic mover and shaker this week is Friday's employment report from the Bureau of Labor Statistics. This monthly report contains a wealth of data for economists, the most publicized being the month-over-month change in Total Nonfarm Employment (the PAYEMS series in the FRED repository). However, each month a few days before we receive the highly anticipated jobs report, ADP releases their data on new nonfarm private jobs.

The ADP employment report revealed that 152K nonfarm private jobs were added in May, a slowdown from the 188K private jobs added in April. The latest reading came in lower than the expected 173K addition of new private jobs.

The forecast for the forthcoming BLS report is that 170,000 private nonfarm jobs were added in May. However, the forecast for the full nonfarm jobs (the PAYEMS number) is for 185,000 jobs to have been added. Here is a visualization of the two series over the past twelve months.

ADP employment versus BLS employment

Here is an excerpt from today's ADP report press release:

“Job gains and pay growth are slowing going into the second half of the year,” said Nela Richardson, chief economist, ADP. “The labor market is solid, but we're monitoring notable pockets of weakness tied to both producers and consumers.”

Here is a snapshot of the monthly change in the ADP headline number since the company's earliest published data with the new methodology in 2010. This is quite a volatile series, so we've plotted the monthly data points as dots along with a six-month moving average, which gives us a clearer sense of the trend. The latest six-month moving average is 166,000, up from 158,000 in April.

ADP Nonfarm Private EmploymentAs we see in the chart above, the trend peaked in September 2015 and then went negative for the first time in late 2019, just before the NBER declared a recession start. The COVID-19 pandemic has brought employment numbers down to levels we have never seen this century. The trend reached a new high in 2021 at 778,000 and has recently dropped back to pre-pandemic levels.