Private sector employment growth decelerates sharply in May: ADP/Moody's

US: ADP private sector employment change +27K in May vs. 180K expected

"That is now starting to show up in the job market".

Private employers added fewer workers in May than any month in the past nine years, falling far short of analyst estimates and sending a troubling signal about the state of the USA labor market.

The 25 percent tariffs levied by President Donald Trump on $250 billion of annual imports from China have raised costs for some businesses and consumers, but don't appear to have severely affected the economy in general.

"Job growth is moderating", Moody's Analytics chief economist Mark Zandi statement in a statement. "Labor shortages are impeding job growth, particularly at small companies, and layoffs at brick-and-mortar retailers are hurting". A reading above 50 indicates expansion in the sector, which accounts for more than two-thirds of US economic activity.

The report revealed growth for 16 major industries, which include real estate, finance, insurance, information, social assistance, and healthcare.

"Though this won't completely dismiss the rate-cut-this-year speculation, the much better-than-expected non-manufacturing ISM print helps", said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto.

Stocks on Wall Street were trading higher.

ADP's report, released today, found that American businesses added just 27,000 jobs in May, the fewest since March 2010.

The payroll and human services company said in its monthly ADP National Employment Report that total nonfarm private employment rose from April to May.

Fed Chairman Jerome Powell stated that the agency would act appropriately in order to sustain expansion.

The trade tensions and fading stimulus from the White House's tax cuts and spending increases are slamming the brakes on the economy.

There has been anecdotal evidence of worker shortages in the transportation, manufacturing, and construction industries.

Economists polled by Reuters are forecasting non-farm payrolls to have increased 185,000 in May.

The official job growth numbers are scheduled for release on June 7 by the Bureau of Labor Statistics (BLS). CNBC's Rapid Update survey forecasts gains of just 1.7% in the second quarter.

The services sector added 71,000 jobs last month, concentrated in professional and education and health services.

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