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ADP’s latest report shows private sector payrolls increased by just 37,000 jobs in May, a sharp drop from April and well below expectations. This figure is indicative of weaker performance across several major industries and suggests limited hiring activity as economic uncertainty persists, according to LinkedIn.Â
Employment declined in Professional and Business Services (-17K), Education and Health Services (-13K), and Manufacturing (-3K). On the upside, Leisure and Hospitality added 38,000 jobs, Financial Activities grew by 20,000, and Information Services saw a gain of 8,000.
Since January 2023, over 80% of total nonfarm job gains have come from Healthcare, Government, and Leisure and Hospitality. These sectors have so far remained stable, with low layoffs and elevated quits according to the latest JOLTS data. However, outside these areas, employment trends have been far less steady.
Unemployment is expected to remain at 4.2%, with no significant change in labor force participation. Participation among prime-age workers (25–54) has stayed flat since last July, and the employment-to-population ratio has shown little movement as well.
While LinkedIn’s internal data suggests a pickup in hiring from April to May, the larger picture points to a labor market that may be entering a period of limited job creation, driven by sector-specific pressures and reduced workforce expansion.
