The May ADP employment report indicated that private payroll in the US rose 173,000, on par with consensus projections and a slight increase from April’s revised figure of 166,000. May’s report suggests that hiring in private sector continues to be on a strong path, said Barclays in a research report.
Meanwhile, payrolls in t he service sector was up 175,000, a tad higher than April’s 173,000, whereas payrolls in goods-producing sector dropped by 1,000. In the goods-producing sector, hiring in construction rose 12,000, as compared with 14,000 in the previous month. However, the rise was countered by an additional drop in manufacturing payrolls by 3,000. This indicates worsening of employment in mining sector.
Job growth was recorded in the sectors of trade, transportation and utilities, professional and business services, and financial activities, consistent with recent trends. There does not appear to be a clear effect of the Verizon strike on the ADP figures, according to Barclays. The ADP employment statistics do not report information sector employment directly. But the suggested numbers for employment in education and health services, information, leisure and hospitality and other service sectors indicate a moderate slowdown of 14,000.
“For official May employment report, we continue to look for nonfarm payroll growth of 150k, as we do expect the Verizon strike will depress the aggregate statistics”, noted Barclays.
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