Nonfarm private sector employment increased by 173,000 jobs in May, according to the monthly national employment report from ADP and Moody’s Analytics released this morning. The seasonally adjusted result, falling short of the estimate of 180,000 by investment research firm Morningstar, is 10.9 % more than the upwardly-revised 166,000 this April, but is -11% down year-over-year.
Employment in the goods-producing sector, which includes the construction and manufacturing industries, fell for the fourth consecutive month with 1,000 jobs lost. The drop is due to 3,000 jobs lost in the manufacturing industry, as 13,000 jobs were added in the construction industry. Although employment in the construction industry continues to grow, May's numbers are 7.1% down from April, when 14,000 new jobs were added.
About 43.9% of this month's gains, or 76,000 jobs, were associated with small businesses that employ fewer than 50 people. Among them, very small companies with no more than 19 employees hired 38,000.
The professional and business services category—including architecture and engineering firms—added 43,000 jobs from during this month, a significant gain from April’s 27,000.
Employment growth has slowed since February 2016 when 207,000 job were added, but May's numbers are still an increase from April, when employment in the nonfarm private sector increased by 166,000.
“Job growth has moderated this spring as energy companies and manufacturers shed jobs. Retailers are also more circumspect in their hiring," said Moody's Analytics Chief Economist Mark Zandi. "Despite the recent slowdown, job growth remains strong enough to reduce underemployment.”
The BLS employment situation report released tomorrow morning will offer more details about job growth in the architecture, engineering, and construction market, but typically mirrors ADP's report.