ADP: Manufacturing Employment Rose for the Sixth Straight Month, up by 8,000 in May

ADP reported that manufacturing employment rose by 8,000 in May, increasing for the sixth straight month. From December through May, the sector added 114,000 net new workers. This was yet another sign that we have turned a corner in the labor market, with employers accelerating their hiring in light of stronger activity and sentiment. In contrast, hiring in 2016 was flat for the year as a whole. We are hopeful the trend of stronger job growth is one that continues in the coming months.

Meanwhile, total private employment increased by 253,000 in May, well above the consensus estimate of around 185,000 and a nice jump from the 174,000 gain in April. Year to date, nonfarm private payrolls have risen by 239,696 per month on average, which is significantly higher than the 180,892 workers added each month in 2016 as a whole.

Beyond manufacturing, the largest employment growth in May included professional and business services (up 88,000), trade, transportation and utilities (up 58,000), education and health services (up 54,000) and construction (up 37,000), among other sectors. However, leisure and hospitality (down 11,000) and information (down 8,000) saw declines. Small and medium-sized businesses (i.e., those with fewer than 500 employees) accounted for 77.5 percent of all net new workers in May.

Tomorrow, the Bureau of Labor Statistics will release its latest estimates of job growth for May. The consensus estimate is for 185,000 workers being added in the month, but hopefully, job growth surprises to the upside, much like the ADP figures. For manufacturers, we would also expect to see employment gains for the sixth consecutive month, likely around 10,000 workers.

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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