US private-sector hiring hits 9-year low in May: ADP

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US hiring crashed unexpectedly last month, hitting its lowest level in nearly a decade as small businesses and construction companies shed workers, according to payroll data released Wednesday.

The sudden drop in hiring left forecasts in tatters and suggested Friday's highly anticipated federal jobs report for May could also come in well below expectations -- although the two are frequently out of step.

The private sector hired just 27,000 new positions, after the huge 271,000 gain recorded in April, payrolls firm ADP reported.

That made hiring the lowest since March 2010 and well below the 170,000 increase economists forecast.

The ADP data showed employment at small business -- especially construction -- dropped sharply, as they struggled to find workers in a very tight jobs market.

"Following an overly strong April, May marked the smallest gain since the expansion began," Ahu Yildirmaz, co-head of the ADP Research Institute, said in a statement.

"Large companies continue to remain strong as they are better equipped to compete for labor in a tight labor market."
Ian Shepherdson of Pantheon Macroeconomics, who was not involved in producing the report, said the data from ADP's own payroll clients had been "very soft."