Private companies increased their job creation last month, adding 173,000 net new positions, but hiring lagged last years stronger pace, payroll firm Automatic Data Processing said Thursday.
The May growth was an increase from the upwardly revised 166,000 net new jobs created the previous month. The April figure initially was estimated at 156,000, which would have been the slowest pace in three years.
Still, job creation in April and May was well off the strong monthly pace of about 207,000 last year. So far this year, monthly private-sector job growth has averaged about 188,000, ADP said.
There does appear to be some slowing in job growth, at least in the last two or three months, said Mark Zandi, chief economist at Moodys Analytics, which assists ADP in preparing the monthly report.
I think its premature to conclude this is going to be a persistent slowdown, he said.
The U.S. economy has been averaging about 200,000 net new jobs a month for about five years and a slowdown probably is on the horizon as the nation approaches whats considered full employment, Zandi said.
Manufacturers, who have been hit by the global economic slowdown and the strong dollar, shed 3,000 positions in May, ADP said. It was the fourth straight month of job losses in that sector, though Mays figure was an improvement over the 10,000 net job cuts in April.
Economists watch the ADP data as a harbinger of the governments job report, due out on Friday.
The Labor Department report, which covers private- and public-sector hiring, is expected to show the economy added about 160,000 net new jobs in May. That would be similar to Aprils disappointing 158,000 job growth.
But economists said the May figure will be temporarily skewed downward because of a strike by nearly 40,000 Verizon workers, which as settled last week. The Labor Department would count those workers as unemployed last month.
ADP does not consider striking workers to be unemployed, Zandi said.
Despite the slowing job growth recently, the labor market still appears to be healthy, he said.
On Thursday, the Labor Department said first-time claims for unemployment benefits fell slightly last week to 267,000. The figure is historically low.
Also on Thursday, another private report showed that the number of job cuts announced by U.S. companies fell to a five-month low in May.
There were 30,157 layoffs and other workforce reductions announced last month, less than half of the 64,141 in April, said career counseling firm Challenger, Gray & Christmas Inc.
May could be the start of a summer slowdown in the pace of job cutting as companies take a pause following the period of heavy downsizing that started the year, said John A. Challenger, the companys chief executive.
Still, largely because of major cutbacks by energy companies caused by low oil prices, announced job cuts are up 13 percent this year compared with the same period in 2015, Challenger said.