Economy Watch: Private Sector Hiring Slows, Says ADP
- Jun 05, 2014
The economy created a lot of jobs in April, and the question now is whether the upsurge will continue in May. Official numbers will be out from the Bureau of Labor Statistics on Friday, but as usual Automated Data Processing came out with its estimate for the month on the Wednesday before the BLS report. ADP says hiring slowed down in May.
According to ADP, private sector employment increased by 179,000 jobs in May, compared with 215,000 in April. Small businesses (fewer than 50 employees) added the most: 82,000 positions. Large businesses (more than 500 employees) added the least: 37,000 new jobs. The report, which is derived from ADP’s payroll data, is only intermittently in synch with the BLS report.
“Job growth moderated in May,” asserts Mark Zandi, chief economist of Moody’s Analytics (Moody’s collaborates with ADP to prepare the report). “The slowing in growth was concentrated in professional/business services and companies with 50-999 employees. The job market has yet to break out from the pace of growth that has prevailed over the last three years.”
Beige Book reports increased economic activity
The Federal Reserve released the latest Beige Book on Wednesday, with all 12 districts report that economic activity expanded recently, with some aspects of real estate growing more strongly than others. Residential real estate activity, for example, has been decidedly mixed since the last report, with a lack of inventory cited as a constraining factor.
Also, according to the report, home prices continued to increase across most of districts, though a few places, such as the Boston District, report some pullback in prices of single-family homes (but not condos). The New York, Chicago and Dallas Feds reported strengthening demand for apartment rentals, whereas Boston noted some slackening in demand. Homebuilders gave mixed reports on new home sales and construction in recent weeks.
Non-residential construction activity came in “steady to stronger” in most places, according to the Beige Book, and in fact the commercial real estate market was mostly stronger since the last report. Leasing activity and vacancy rates improved in the most districts, and were generally steady in others. The Dallas Fed described market conditions as “robust.”
ISM non-manufacturing index up in May
The Institute for Supply Management reported Wednesday that its non-manufacturing index came in at 56.3 percent in May, up from 55.5 percent in April. The ISM non-manufacturing employment index increased from 51.3 percent in April to 52.4 percent in May. Above 50 indicates expansion, below 50 contraction, so both metrics are in positive territory.
Wall Street bounced up a little on Wednesday, with the Dow Jones Industrial Average gaining 15.19 points, or 0.09 percent. The S&P 500 was up 0.19 percent and the Nasdaq gained a healthier 0.41 percent.