ADP: Manufacturing Employment Down Again in May

By June 5, 2013Economy

Automated Data Processing (ADP) said that nonfarm payroll growth rose by 135,000 in May, lower than the consensus estimate of 165,000. The pace of hiring has slowed somewhat from earlier in the year. The average employment gain between November and February was 215,000, but that has fallen to just 134,000 in the past three months. This data is consistent with other indicators which have shown increased skittishness on the part of businesses to hire of late.

This is definitely the case for manufacturers. ADP reported that there were 6,000 fewer manufacturing workers on net in May, building off of the loss of 15,000 employees in the sector in April. Employment growth in the sector has been extremely soft since the second half of last year, with negative jobs numbers in seven of the past eleven months. In fact, the estimated employment for manufacturers of 11.904 million in May 2013 is 12,000 workers less than the 11.922 million observed in May 2012.

Note that this data is an estimate based on ADP data, with the Bureau of Labor Statistics (BLS) reporting manufacturing employment of 11.990 million in April 2013. Less important than the total is the trend, and we have seen weakness in the official jobs data for the sector, as well. We get new jobs numbers from BLS on Friday, with a consensus predicting 168,000 nonfarm payroll jobs added. Manufacturing employment was flat in April, and we are not expecting much growth, if any at all, for the sector in May.

Looking specifically at the ADP report, the service-providing sectors added 138,000 net new workers in the month, with the goods-producing sectors shedding 3,000 on net. The largest gains came from the professional and business services (up 42,000) and trade, transportation, and utilities (up 31,000) sectors. Construction hiring rose by 5,000. Roughly 72 percent of the net new jobs came from small and medium-sized businesses (e.g., those with less than 500 employees).

Chad Moutray is chief economist, National Association of Manufacturers.

Chad Moutray

Chad Moutray

Chad Moutray is chief economist for the National Association of Manufacturers (NAM) and the Director of the Center for Manufacturing Research for The Manufacturing Institute, where he serves as the NAM’s economic forecaster and spokesperson on economic issues. He frequently comments on current economic conditions for manufacturers through professional presentations and media interviews. He has appeared on Bloomberg, CNBC, C-SPAN, Fox Business and Fox News, among other news outlets.
Chad Moutray

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