#United States #Employment Growth #ADP National Report #Pay Insights #Roseland, N.J.

Overview of the May 2025 ADP National Employment Report

The recently released ADP National Employment Report for May 2025 reveals noteworthy trends in the U.S. private sector job market. According to the data compiled by ADP Research in collaboration with the Stanford Digital Economy Lab, private sector employment experienced a modest increase of 37,000 jobs. In addition, the report highlights a significant year-over-year pay growth, with annual pay rising by 4.5%.

Key Findings from the Report

This report serves as an important indicator of the current state and momentum of the labor market, providing insights derived from the anonymized payroll data of over 25 million employees across various industries. Here are some key findings from the report:

• - Total Job Changes: The total increase in private employment for May stands at 37,000 jobs. However, it is important to note that this rate of hiring marks the lowest since March 2023.
• - Employment by Sector: The increase in jobs was primarily observed in the service-providing sector, which added 36,000 jobs. However, the goods-producing sector saw a decline of 2,000 jobs, with notable losses in natural resources/mining and manufacturing sectors.
• - Regional Job Changes: Job changes varied significantly by U.S. regions. The Midwest led with a gain of 20,000 jobs, while the South saw a decline of 5,000 jobs, indicating a disparity in employment trends across the country.

Analyzing Pay Growth Trends

The report also sheds light on pay growth trends, which remain stable despite the overall slowdown in job additions. The year-over-year pay increase for individuals staying in their jobs was recorded at 4.5%. On the other hand, those switching jobs saw even greater salary increases of 7.0%, a figure that has remained consistent since April.

Industry-Specific Pay Changes

For a deeper understanding, the report also presents median annual pay changes by industry sectors:

• - In the goods-producing industries, pay grew as follows:

- Natural resources/mining: 4.5%
- Construction: 4.6%
- Manufacturing: 4.6%

• - Meanwhile, in the service sector, median pay changes included:

- Financial activities: 5.2%
- Education/health services: 4.6%
- Leisure/hospitality: 4.8%

Pay by Firm Size

The report further breaks down pay changes by the size of the firms:

• - Small firms (1-19 employees) saw a pay increase of only 2.6%. Larger firms (500+ employees) exhibited a more robust growth at 4.8%.

Conclusion

The continued pay growth amidst a slowing job market suggests a complex dynamic in the U.S. economy. Despite modest job creation, competitive pay growth indicates companies are still striving to attract and retain talent in a tight labor market. Dr. Nela Richardson, chief economist at ADP, remarked that while hiring momentum may be decreasing, strong pay levels are expected to support job change trends into the upcoming months. The next ADP National Employment Report will be released on July 2, 2025, and will provide further insights into these evolving economic conditions.

By utilizing this report, businesses and policymakers can gain valuable insights into the underlying trends affecting the U.S. labor market and make informed decisions that drive economic growth.