US private sector payrolls fell below expectations in May

The US private sector added significantly less jobs than expected in May, signaling that demand for labor slowed, in the situation of tightening financial conditions and rising interest rates, but job openings remains very strong and holding near the record high.

The ADP report showed that US private payrolls rose by 128,000 last month, falling well below forecast for 300,000 increase and against downwardly-revised April’s figure from 247,000 to 202,000.

The private sector labor report is released ahead of more comprehensive and closely watched non-farm payrolls, due on Friday, and often used as an indication for NFP report, though the different methodology in calculating the figure, makes poor record predicting.

Economists expect that US non-farm payrolls increased by 325,000 in May, after the economy created 428,000 jobs in April, holding continuously above 400,000 mark for one year.

The separate report showed that 11.4 million new jobs were created in April, just under the record 11.8 million, reached last month. Slightly lower number of new jobs resulted narrowing gap between offered jobs and workers to 3.3% in April from 3.6% in March