In its most recent monthly employment report, ADP relayed a net gain of 128,000 nonfarm private employment between April and May, qualifying as the fourth consecutive month in which job creation decelerated.
The modest growth was caused by an increase in large and mid-sized business payrolls but offset by a net loss of small business employment. While large and medium businesses witnessed a growth of 122,000 and 97,000 jobs, these figures were offset by a net loss of 91,000 small business jobs.
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The majority of jobs formed were found in the service sector, with goods-producing jobs accounting for just 24,000 of the 128,000 total.
Last year, when job creation stalled, it was usually accounted for by new waves of the CCP (Chinese Communist Party) virus, which created momentary roadblocks to full employment recovery. Although, the recent deceleration in job growth is hard to attribute to the pandemic: Total cases are still lower than they were last winter when job growth was higher than present levels. Lockdowns and business closures have virtually vanished as the virus becomes an ambient part of life.
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Instead, the new employment figures seem to align with the general slowing down of the U.S. economy, attested to by several months of stock market downturns. This economic slump was widely predicted due to the Federal Reserve’s increasingly hawkish policy of rate hikes to curb inflation, yet the longevity and severity of any economic downturn are uncertain at the current juncture.
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Last month, Federal Reserve Chairman Jerome Powell declared that the purpose of the Fed was to “get wages down.” “There’s a path by which we would be able to have demand moderate in the labor market and have—therefore have vacancies come down without unemployment going up, because vacancies are at such an extraordinarily high level,” announced Powell throughout a press conference in May.
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“By moderating demand, we could see vacancies come down, and as a result—and they could come down fairly significantly and I think put supply and demand at least closer together than they are, and that that would give us a chance to have lower—to get inflation—to get wages down and then get inflation down without having to slow the economy and have a recession and have unemployment rise materially,” Powell went on.
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