US Private Employers Added 37,000 Jobs in May 2024

US private employers reported a modest increase of 37,000 jobs in May 2024, according to the latest ADP payroll report. This marked the smallest monthly gain since March 2023 and fell well short of economists’ consensus forecasts of about 110,000 new jobs. The May figure also declined from April’s revised total of 60,000 private-sector jobs.

Where the Jobs Came From

Nearly all of the reported job growth in May came from the services sector, which added approximately 36,000 positions. The gains were concentrated in a handful of service industries, led by financial activities, information services and hospitality. Those areas helped offset declines elsewhere but were not large enough to produce a broadly robust hiring picture for the month.

By contrast, the goods-producing side of the economy lost about 2,000 jobs in May. The declines were driven primarily by reductions in manufacturing and mining employment. The weakness in goods-producing industries suggests ongoing pressures in parts of the economy tied to trade, supply chains and capital spending decisions.

What Economists Are Saying

Economists warned against reading too much into the ADP numbers alone. ADP’s private payroll report has shown a mixed record in recent years when compared with the official government employment releases, and it often diverges from the Bureau of Labor Statistics’ nonfarm payrolls in both timing and magnitude. Because of that history of variance, analysts typically treat the ADP report as one data point rather than a definitive signal about the direction of overall employment.

That caution is especially relevant this month, since employment trends can shift quickly from month to month. A relatively small sample or short-term swings in hiring by a subset of employers can produce headline moves that may not reflect a broader labor market trend.

Broader Context and Policy Concerns

Some economists pointed to growing signs that the labor market is gradually cooling. The ADP report referenced economic uncertainty connected to the Trump administration’s tariff policies as a headwind that could be weighing on hiring decisions, particularly in industries exposed to trade and commodity prices. Uncertainty about tariffs and trade rules can lead firms to delay investment or hiring in goods-producing sectors, which would help explain the manufacturing and mining job losses reported for May.

At the same time, services-oriented employers have continued to hire, indicating that consumer-facing and knowledge-based industries remain relatively resilient. Financial activities and information services often respond differently to economic changes than manufacturing does, which helps account for the unevenness in May’s job picture.

Looking Ahead: Official Government Report

Markets and policymakers are awaiting the official government employment report, scheduled for release on Friday. Economists surveyed ahead of that release expected the headline payrolls number to be stronger than ADP’s private-sector figure, with forecasts centering around 130,000 total jobs added. The government report uses a different methodology and a broader data set, so it often produces figures that differ from private payroll estimates.

Until the official numbers are released, the ADP report will serve as an early snapshot of private hiring trends for May but should be interpreted alongside other indicators — including initial jobless claims, payrolls data from other sources, and sector-specific reports — to build a fuller picture of the labor market.

In sum, the ADP report for May 2024 pointed to modest private-sector hiring concentrated in services, offset by losses in goods-producing industries. Economists urge caution in interpretation and will watch the upcoming government employment release for a more comprehensive assessment of the labor market’s health.