ADP released its monthly nonfarm payrolls report on Thursday, which pointed to a disappointing month of job creation in May that fell short of expectations but continued a trend of declining labor market returns. over the past few months.
In its latest monthly jobs report, ADP relayed a net gain of 128,000 private non-farm payrolls between April and May, calling it the fourth consecutive month of job creation deceleration.
The modest growth was spurred by an increase in the payroll of large and medium-sized businesses, but offset by a net loss of jobs in small businesses. While large and medium-sized businesses saw growth of 122,000 and 97,000 jobs respectively, these figures were offset by a net loss of 91,000 jobs in small businesses.
The vast majority of jobs created were in the service sector, with goods-producing jobs accounting for only 24,000 of the total 128,000.
Last year, when job creation slowed, it was often due to new waves of the CCP (Chinese Communist Party) virus, which created momentary obstacles to resuming full employment. However, the further deceleration in job growth is difficult to attribute to the pandemic: the total number of cases remains lower than it was last winter, when job growth was above current levels. ; and lockdowns and business closures have all but disappeared as the virus becomes an ambient part of life.
The new employment figures seem to be more in line with the general slowdown in the American economy, evidenced by several months of falling stock markets. This economic slump was widely predicted as a consequence of the Federal Reserve’s increasingly hawkish rate hike policy to rein in inflation, but the longevity and severity of any economic downturn is uncertain at this time.
Last month, Federal Reserve Chairman Jerome Powell said the Fed’s intention was to “cut wages” because he feared high wages would lead to a
“There is a route by which we would be able to have a moderate demand in the labor market and have – therefore vacancies diminished without unemployment increasing, because the vacancies are at an extraordinarily high level. high,” Powell said at a press conference in May. .
“By moderating demand, we could see vacancies go down, and as a result – and they could go down quite significantly and I think supply and demand are at least closer than they are, and that it would give us a chance to have less – to lower inflation – to lower wages and then lower inflation without having to slow down the economy and have a recession and raise unemployment significantly Powell continued.
While wages have increased significantly since the outbreak of the CCP virus, these gains are being undermined by the rate of inflation, which translates into lower purchasing power for workers despite higher wages.
Since the outbreak of the CCP virus, the recovery of lost jobs has occurred with remarkable speed, and unemployment is now almost as low as it was on the eve of the epidemic. As of last April, overall unemployment had reached 3.6%, close to the low of 3.5% seen in February 2020. However, it appears that unemployment has bottomed out as job creation has begun to stagnate in the latest payroll reports.