Small businesses gained 235,000 jobs in May, according to the May ADP National Employment Report. The report is produced by the ADP Research Institute in collaboration with the Standford Digital Economy Lab.
Overall, including small, medium and large businesses, the job gain was 278,000. That’s despite a loss of 106,000 jobs in large businesses (500 or more employees).
According to ADP Chief Economist Nela Richardson, “small businesses took up the slack” to help create another strong month of hiring.
The largest job gains overall were in Leisure/Hospitality with 208,000 jobs. More strong job growth was seen in Construction (64,000) and Natural Resources/Mining (94,000).
The categories where jobs were lost included Manufacturing, down 48,000 jobs, and Financial Services, with a loss of 35,000 jobs. Additional categories with significant job loss were Professional/Business Services (29,000), Information (15,000) and Education/Health Services (5,000).
Richardson said that the rate of pay growth is slowing for job changers.
“This is the second month we’ve seen a full percentage point decline in pay growth for job changers,” Richardson said. “”Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring.”
ADP Small Business Jobs Report
Strong But Fragmented Hiring Market
The hiring market is strong but fragmented. Richardson said that the construction industry is benefiting from strong housing start and remodeling numbers, although the industry is still challenged by labor shortages. Natural Resources/Mining is benefitting from the high oil prices – oil suppliers are capitalizing on that condition and hiring.
Employment Numbers Driven by Small Firms
Richardson said the large firms (500 or more employees) “hired aggressively” last year but are now downsizing their numbers of employees. Small businesses, with fewer than 50 employees, are taking up the slack.
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This article, "Small Businesses Gained 235K Jobs in May, ADP Reports" was first published on Small Business Trends