ADP National Employment Report: 37K 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 forecast for the forthcoming BLS report is that 127,000 jobs were added in May. 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 37,000 nonfarm private jobs were added in May, down from 60,000 in April. This is the lowest level since March 2023 when there was a reduction of 53,000 jobs. The latest reading was lower than the expected 111,000 addition.

Here is a visualization of the two series over the past twelve months. There is no correlation between the ADP and BLS employment report.

ADP employment versus BLS employment

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

"After a strong start to the year, hiring is losing momentum. Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers.

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 115,000, the lowest level in ten months.

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 875,000 and has recently dropped back to pre-pandemic levels.