(JustPatriots.com)- The U.S. economy got some bad news this week, as private payrolls in the country ended up increasing much less than what experts had predicted.
The ADP National Employment Report released on Thursday showed that private payroll jobs increased by 128,000 over the last month. In addition, the data for April was revised down from the initial 247,000 jobs added to 202,000 jobs added.
Reuters had polled economists in advance of the data being released, and they predicted that private payrolls were going to increase by roughly 300,000 jobs.
The fact that the final data came in less than half of what was predicted could be really bad news for the economy as a whole. It suggests that the labor market is starting to cool as higher interest rates are here.
There are still plenty of job openings throughout the country, though.
On Friday, the Bureau of Labor Statistics released its monthly jobs report, which showed that employers in the U.S. added roughly 390,000 total jobs in May. While that’s a nice addition, it’s still a much slower pace than in recent months.
The nation’s unemployment rate remained stagnant at 3.6%.
Economists were predicting that the unemployment rate would drop slightly to 3.5% in May, though they weren’t too far off the initial predictions.
Many people are fearing a recession is coming to America in part due to the Federal Reserve increasing interest rates at a rapid pace to try to fend off rising inflation.
Higher interest rates often cause businesses to slow down on expansion efforts and other investment plans, and that typically includes hiring workers.
The Labor Department data showed that 69% of all the industries that are tracked reported job gains. One of the biggest exceptions was in retail, though, which is the largest sector of employment in terms of total number of jobs.
The Labor Department’s May report said there was a net loss of 60,7000 jobs in the retail sector for May.
Job gains were seen in both the hospitality and leisure sector, which combined added 84,000 new jobs, partly because they are anticipating a strong travel season this summer. Americans are pent-up from having to stay in and not travel during the COVID-19 pandemic, and are expected to travel at high rates this summer.
Other data released by the Bureau of Labor Statistics on Wednesday showed the country had a total of 11.4 million job openings as of April 30. That meant that the job-workers gap dropped from 3.6% in March to 3.3% in April. That’s still an extremely high rate, though.
That Labor Department survey said that there are roughly two job openings to every one person who is looking for a job. That would seemingly create a very strong job market for people who are looking for employment.
The fact that employers aren’t adding jobs as strongly as economists expected isn’t a great sign, though. It could point to the fact that businesses are holding off on filling openings while they wait to see what happens in the overall economy.