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Job creation at companies fell to the slowest pace of the pandemic-era recovery in May.
Source: ADP
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Private sector employment increased by only 128,000 for the month, falling below the 299,000 Dow Jones estimate and a decline from the downwardly revised 202,000 in April.
The huge drop-off marked the worst month since the start of massive layoffs in April 2020, when companies sent over 19 million workers.
Nela Richardson, chief economist of ADP, stated that under the backdrop of a tight labor market and heightened inflation, monthly job gains are near to the pre-pandemic levels.
Small businesses suffered the biggest hit during the month as companies employing less than 50 workers reduced their payrolls by 91,000. Out of the total decline, 78,000 layoffs come from businesses with less than 20 employees.
May’s decline in hiring comes amid the ongoing war in Ukraine and fresh Covid-related lockdowns in China that have increased concerns that the U.S. could plunge into a recession.
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