U.S. businesses added just 135,000 jobs in May, the second straight month of weak gains.
Payroll provider ADP said Wednesday that May’s gain was above April’s revised total of 113,000. But it’s much lower than the gains ADP reported over the winter, which averaged more than 200,000 a month from November through February.
Mark Zandi, chief economist at Moody’s Analytics, blamed the slowdown on higher taxes and steep government spending cuts enacted this year.
The ADP survey is derived from payroll data and tracks private employment. It has diverged at times from the government’s more comprehensive monthly jobs report, which will be released Friday. In April, the government said private employers added 176,000 jobs, much higher than the ADP’s estimate.
For May, economists forecast that the government’s report will show employers added 170,000 jobs, according to a survey by FactSet. The unemployment rate is expected to stay at a four-year low of 7.5 percent.
Based on the government’s survey, hiring has picked up in the six months ending in April. Employers have added an average of 208,000 jobs per month. That was better than the 138,000 per month added in the previous six.
Economists forecast growth is slowing to around a 2 percent annual pace in the April-June quarter, down from 2.4 percent in the first three months of the year. Consumers and businesses are likely slowing their spending because of the tax increases and spending cuts. And weaker global growth has reduced demand for U.S. exports, which has slowed activity at U.S. factories.