An official report won't be released by the Commerce Department until Friday, but private sector payroll processor ADP says companies added just 27,000 jobs during the month of May.
According to ADP, the private sector cut far more jobs than it added in May and I think we know why.
From CBS News:
Washington – U.S. companies last month added the fewest jobs in nine years, a private survey found, as manufacturers, construction firms and mining companies cut workers. Payroll processor ADP said Wednesday that businesses added just 27,000 jobs in May, the fewest since March 2010. Jobs in construction fell 36,000 and in manufacturing by 3,000.
Small business – 49 or fewer employees – fared the worst, losing 52,000 workers last month.
May's results are a sharp contrast to the robust job creation ADP found in April. That month's now-revised new jobs totaled 271,000.
What do manufacturers, construction firms, mining companies, and small business all have in common?
They're the most vulnerable to Trump's whims and machinations; the most vulnerable to his trade war. Manufacturers, construction firms, and mining companies have seen their costs increase under the weight of Trump's tariffs and small business are ill-equipped to either absorb the cost of tariffs or maneuver around them. They do not have the resources or flexibility in their supply chains that large multi-national corporations have.
ADP's report does not include government hiring, meaning Friday's official report from the Commerce Department is not going to look quite this bad, but it's not going to be exceptionally pretty, either. Economists are revising their estimates downward based on these dismal numbers from the private sector.
Economic forecasts have been buoyed by robust job creation that hasn't stalled even while sales have fallen and costs have increased. And this one report may not necessarily be a sign of a looming trend in the wrong direction, but if falling sales and rising costs catch up to the labor market and job creation slows, the bottom is going to fall out.