Businesses Continue to Add Jobs But at Slower Pace
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Private sector jobs are still being added, but not as fast as expected.
Today's ADP National Employment Report showed that private-sector employment increased by 133,000 in May, versus economist expectations of 150,000 jobs. April's report was revised down modestly, from the initial estimate of 119,000 to a revised estimate of 113,000.
Small businesses continued to lead job gains, adding 67,000 in the month. Medium businesses added 57,000 jobs, while large businesses added just 9,000.
The goods-producing sector added just 1,000 jobs while the service-providing sector added 132,000 jobs.
According to Joel Prakken, Chairman of Macroeconomic Advisers, LLC, "While May's increase was the twenty-eighth consecutive monthly advance, it nonetheless reflected a notable slowdown in the recent pace of hiring. The sharpness of the deceleration seems consistent with other incoming data suggesting the economy, weighed down by heightened uncertainty over the European financial crisis and by growing concerns about domestic fiscal policy, slowed early in the year."
Prakken added: "The modest rise in private employment suggests that the national unemployment rate probably did not decline in May unless the labor force continued to decline. Hence, today's estimate, especially if reinforced by a weak reading on employment from the Bureau of Labor Statistics on Friday, likely will fuel concern that the economy is slowing fundamentally for the third summer in a row."
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Today's ADP National Employment Report showed that private-sector employment increased by 133,000 in May, versus economist expectations of 150,000 jobs. April's report was revised down modestly, from the initial estimate of 119,000 to a revised estimate of 113,000.
Small businesses continued to lead job gains, adding 67,000 in the month. Medium businesses added 57,000 jobs, while large businesses added just 9,000.
The goods-producing sector added just 1,000 jobs while the service-providing sector added 132,000 jobs.
According to Joel Prakken, Chairman of Macroeconomic Advisers, LLC, "While May's increase was the twenty-eighth consecutive monthly advance, it nonetheless reflected a notable slowdown in the recent pace of hiring. The sharpness of the deceleration seems consistent with other incoming data suggesting the economy, weighed down by heightened uncertainty over the European financial crisis and by growing concerns about domestic fiscal policy, slowed early in the year."
Prakken added: "The modest rise in private employment suggests that the national unemployment rate probably did not decline in May unless the labor force continued to decline. Hence, today's estimate, especially if reinforced by a weak reading on employment from the Bureau of Labor Statistics on Friday, likely will fuel concern that the economy is slowing fundamentally for the third summer in a row."
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