Inside the ADP Report - May’s job growth was...
Bottom Line: Uninspiring to say the least. A month after having reached the lowest unemployment rate since 1969 – we didn’t make progress in May in the private sector, adding only 27,000 jobs. This was the weakest month for private sector jobs growth since the spring of 2010. So, what happened? The retail’pocolyse among other things... By the numbers...
- Small businesses: -52,000
- Medium sized businesses: +11,000
- Large businesses: +68,000
I’ll cut to the chase. Everything about this save the total number of large business jobs is bad. Ideally, small businesses perform best. A loss of over 50,000 small biz jobs is just plain ugly. So, what went wrong here? Other than the aforementioned reference, ironically enough it’s a strong economic indicator which saved this from being a debacle. But first the retail disaster.
You can’t go more than a week without hearing about the next round of store closures by company X. That hit especially hard in May. But that’s only part of the story. As I recently pointed out 70% of all retailers have ten or fewer employees. The small business story is very much part of the overall retail’pocolyse story. There are 43,000 fewer retail jobs in the country today than a month ago. Many of those are at small retailers. Another reminder to shop local when there’s a fit. The other end of the equation is the sign of the tight labor market. Smaller businesses that are losing employees to other opportunities are struggling to hire replacements.
So, what do we make of this? Nothing yet. Last month was incredibly strong with over 270k new jobs. This month stunk. If we see it continue next month, I’ll become more concerned. If it continued for two more months, we’d have a trend and that conversation would be different.