Conflicting data from the BLS and ADP leaves the true health of the financial sector open for debate.
The latest U.S. job numbers for Wall Street don’t line up.
The U.S. Bureau of Labor Statistics (BLS) reported Friday that employment in the financial activities sector fell by 22,000 jobs in May, with insurance carriers losing 11,000 positions and commercial banking eliminating 3,000 jobs. The ADP National Employment Report, issued a day earlier, however, saw the same sector add 7,000 new jobs, a difference of 29,000 jobs.
“Hiring was more broad-based in May than we’ve seen in the last few years,” Nela Richardson, chief economist at ADP, said in the report. “The labor market continues to show sustained momentum going into the summer hiring season.”
But by how much is open for debate. The BLS’s Employment Situation Summary for May notes that nonfarm payroll employment increased by 172,000, up approximately 50% from April’s figure. ADP’s report, on the other hand, estimated that U.S. private employers added 122,000 new jobs across all sectors, up approximately 12% from the preceding month.
Insurance Takes a Hit
According to the BLS data for May, insurance carriers and related activities saw the greatest job declines in the sector (-10,700); followed by credit intermediation and related activities (-4,800); securities, commodity contracts, funds, trusts, and other financial vehicles, investments, and related activities (-4,600); and monetary authorities-central bank (-100).
These numbers should be surprising, given that institutions such as Standard Chartered and Commerzbank announced plans to lay off thousands of employees in May, while Bank of America, Citi, and Wells Fargo continue their existing downsizing plans.
According to ADP data, the financial activities sector trailed job growth in other sectors, including education and health services (57,000 jobs); trade, transportation, and utilities (36,000 jobs); professional and business services (11,000 jobs); and leisure and hospitality (8,000 jobs). The only sectors that Wall Street beat were the miscellaneous “other services,” which added 4,000 jobs, as well as the information sector, which lost 9,000 jobs, and the natural resources and mining sector, which lost 3,000 jobs.
Barbell Hiring
Small businesses hired the most employees in May, according to ADP data. Firms with between one and 19 employees hired 49,000 employees, while companies with between 19 and 49 employees added 18,000. The largest companies, with more than 500 employees, filled 40,000 jobs. Companies that fell in between created 17,000 new jobs.
In other words, job growth for the period was driven by the two extremes of the hiring spectrum, with mom-and-pops on one end and corporate giants on the other.
In the meantime, wage growth advanced year-on-year (YoY), according to the latest research by Bank of America Institute. Higher-income wage growth slowed to 5.6% YoY compared to 5.9% YoY in April. Middle-income wages grew 3.5% YoY, while lower-income wages rose 3.1% YoY, which is the highest rate since January 2025. The authors of the Institute report, however, remain cautious of reading too much into wage growth.
“In our view, some recovery is consistent with the stronger jobs growth we have seen in recent months, alongside an increase in job openings seen in the recent Job Openings and Labor Turnover Survey (JOLTS) report from the BLS,” they wrote. “But we view the uptick in wage growth cautiously — sometimes changes in pay growth can reflect differences in the number of pay periods, for example. So, we need to see additional data to confirm the trend.”
