After five months of declining jobs numbers, this morning’s ADP National Employment Report showed gains of 201,000 jobs – almost exactly as economists predicted ahead of the release. The previous month’s report was revised downward slightly, to 165,000 jobs.
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“The labor market moved back up to the 200,000 jobs added mark in May, a number which has been something of a bellwether for healthy employment growth,” said Carlos Rodriguez, president and chief executive officer of ADP, in a statement. “We hope that the May number is the beginning of an upward trend going into the summer months.”
Mark Zandi, chief economist of Moody’s Analytics, which produces the report with ADP, concurred.
“The job market posted a solid gain in May,” Zandi said. “Employment growth remains near the average of the past couple of years. At the current pace of job growth the economy will be back to full employment by this time next year. The only blemishes are the decline in mining jobs due to the collapse in oil prices and the decline in manufacturing due to the strong dollar.”
Manufacturing declined by 5,000 jobs last month, while construction added 27,000 jobs. Professional and business services added 28,000 jobs, down from 35,000 the previous month, while trade, transportation, and utilities added 56,000, up from 41,000 jobs in April.
Small businesses with fewer than 50 employees showed the most growth in May, with 122,000 jobs added, while businesses with 50-499 employees added 65,000 jobs. Large businesses, with 500 or more employees added 13,000 jobs last month; businesses with 500-999 lost 3,000 jobs, while those with over 1,000 employees added 16,000.
Economists predict that Friday’s report from the Bureau of Labor Statistics will reflect gains of 227,000 jobs, and an unemployment rate holding steady at 5.4 percent. All eyes will be on the wage section of the report, which has wavered over the previous months without showing significant growth. April’s report showed an increase of 3 cents an hour, for average hourly earnings of $24.87. The PayScale Index, which measures the change in wages for all U.S. workers, forecasts a 0.7 percent increase in earnings for Q2.
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