Private sector adds 55,000 jobs in May

NEW YORK (CNNMoney.com) -- Private-sector employers added jobs for the fourth month in a row in May, according to a survey released Thursday by a payroll processor.

Automatic Data Processing, which processes paychecks for one in every six U.S. employees, said private-sector employers added 55,000 jobs to their payrolls in May, down from a upwardly revised 65,000 increase in April.

The May increase fell short of the 60,000 jobs economists surveyed by Briefing.com forecasted for the report.

From February to May, the report has shown a monthly average increase of 39,000 jobs, in line with a slow recovery economists are seeing from other surveys. Friday's government jobs report is also expected to show modest job growth, after economists account for a large boost from temporary census hires, said Tim Quinlan, an economist with Wells Fargo Securities.

"It is a very slow recovery, but a recovery nonetheless," he said. "We're growing jobs at a fast enough pace to keep unemployment rate where it is, or slightly lower, but we're not looking at a quick, snapback recovery that many people were hoping for."

According to ADP, the service sector reported an increase of 78,000 jobs, its fifth consecutive monthly gain, while manufacturing payrolls grew by 15,000 jobs. Those gains were offset by losses in the goods-producing sector, which declined by 23,000 jobs.

Construction and financial services jobs showed big monthly declines, as they have for more than two years.

ADP breaks out job trends across categories for small, medium and large businesses -- all three of which showed job growth in May.

The ADP report follows on the heels of a separate jobs number released Wednesday by outplacement firm Challenger, Gray & Christmas Inc.

According to Challenger, planned job cuts inched 1.3% higher in May, driven by shrinking government payrolls, but the pace of downsizing continued to slow. Employers announced plans to cut 38,810 jobs in May, up from April's four-year low of 38,326.

Many economists view the Challenger and ADP reports as a preview of things to come from the government's national unemployment number due on Friday. Economists are forecasting the government's report to show employers added 500,000 jobs in May after expanding payrolls by 290,000 jobs the month before.

Unlike the ADP report, that number also includes government census hires, not just jobs created by private employers.

The national unemployment rate, based on a separate survey, is forecast to ease slightly to 9.8% from 9.9%.