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Job Creation Slows Amid Big Cuts in Manufacturing

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Job creation in the U.S. is demonstrating signs of slowing as wages remain flat.

That’s according to the monthly report on private sector employment released Wednesday (June 5) by ADP. It showed the private sector adding 152,000 jobs in May, down from 188,000 the month before.

The trend was driven, the report said, by a “steep decline in manufacturing,” with that sector losing 20,000 jobs in May. The leisure and hospitality space also saw hiring cool, adding 12,000 jobs in the month.

“Job gains and pay growth are slowing going into the second half of the year,” said Nela Richardson, chief economist at ADP. “The labor market is solid, but we’re monitoring notable pockets of weakness tied to both producers and consumers.”

Annual pay growth was at 5%, the same position it’s held for the last three months. Year-over-year pay increases for people changing jobs fell for the second month in a row, though pay for this group was up 7.8% month over month.

ADP’s findings came one day after the Bureau of Labor Statistics (BLS) released its Job Openings and Labor Turnover Summary, showing that the number of job openings in the United States decreased by 4.8% in April.

There were 8.1 million job openings available on the last business day of April, down from 8.4 million in March, the BLS said. It marked the lowest number of job openings seen in more than three years, adding to data that indicates that the labor market is gradually cooling through slower hiring rather than layoffs.

The greatest drops in job openings in April were in healthcare and social assistance and in state and local government education, the BLS said, with declines of 204,000 and 59,000, respectively.

At the same time, April saw an increase of 50,000 job openings in private educational services, the bureau said. That dovetails with ADP’s figures for May, which showed 46,000 new jobs in the education/health services field.

Both these reports followed last week’s release of the Conference Board Consumer Confidence Index, which — among other things — showed Americans’ views of labor market conditions improving.

Fewer respondents said jobs were “hard to get,” outweighing a small drop in the number who said jobs were “plentiful,” and fewer consumers said they expected a deterioration in future business conditions, job availability and income.