Private payroll growth hits two-year low

Private-sector firms in the U.S. added 37,000 jobs in May, the lowest tally in more than two years, according to the latest report from payroll services provider ADP and Stanford University’s Digital Economy Lab. Despite economic uncertainties, average annual pay growth held steady at 4.5%.

“After a strong start to the year, hiring is losing momentum,” ADP Chief Economist Nela Richardson said in a statement Wednesday. “Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers.”

Based on anonymized payroll data on more than 25 million employees of ADP client firms, the report showed leisure and hospitality leading for monthly job gains at 38,000, as financial services added 20,000 and construction gained 6,000. Those were countered by declines in categories such as business services at 17,000, and education and health services at 13,000.

The ADP-Stanford report is considered a preview of the Labor Department’s monthly report on total private and public nonfarm employment, with May’s numbers including the unemployment rate scheduled for release June 6. U.S. unemployment remained low by historical standards at 4.2% in April.