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Survey: US businesses added 179,000 jobs in May, fewest since January

In this May 16, 2014 photo, Megan Lory, left, talks with Sandra Modena, Sales Manager at Trillium Staffing, at the annual veterans job fair aboard the LST in downtown Muskegon, Mich. Payroll processor ADP reports how many jobs private employers added in May on Wednesday, June 4, 2014. (AP Photo/The Muskegon Chronicle, Madelyn Hastings)

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In this May 16, 2014 photo, Megan Lory, left, talks with Sandra Modena, Sales Manager at Trillium Staffing, at the annual veterans job fair aboard the LST in downtown Muskegon, Mich. Payroll processor ADP reports how many jobs private employers added in May on Wednesday, June 4, 2014. (AP Photo/The Muskegon Chronicle, Madelyn Hastings)

WASHINGTON - U.S. businesses pulled back on hiring in May, adding the fewest jobs in four months, a private survey showed.

Payroll processer ADP said Wednesday that private employers added 179,000 jobs last month, down from 215,000 in the previous month. April's figure was revised slightly lower. Still, the gain in May was in line with the ADP's average monthly hiring figures for the past 12 months.

The data suggest that the government's jobs report, to be released Friday, could also show a modest slowdown from April's big gain of 288,000 jobs. But the ADP numbers cover only private businesses and often diverge from the government's more comprehensive report.

Economists forecast that the government's figures will show that employers added 220,000 jobs in May, according to a survey by FactSet. Analysts generally didn't change their estimates in response to the ADP report.

Hiring appears to be holding steady even though the economy shrank in the first three months of the year at a 1 per cent annual rate, the first contraction in three years. Most of the slowdown has been blamed on unseasonably cold weather, which shut factories, disrupted shipping, and kept shoppers away from stores and malls.

"The labour market remains strong and the economy is still recovering from the weather-induced hit in the first quarter," Paul Dales, senior U.S. economist at Capital Economics, said in a note to clients.

The slowdown in the ADP figures occurred mostly in professional and business services, a category that includes many higher-paying jobs such as accountants and engineers, but also lower-paid temporary workers. That category gained 46,000 jobs, compared to 75,000 in April.

Construction firms added 14,000 jobs in May, slightly below April's figure, while manufacturers gained 10,000, up from only 2,000 in the prior month.

Other recent measures of the job market have been mostly positive. Applications for unemployment benefits are at the lowest level in seven years, evidence that companies are cutting fewer jobs. That is a clear signal employers have largely shrugged off the economy's first-quarter contraction.

A drop in layoffs usually corresponds with a pickup in hiring.

Factories added jobs in May, according to a private survey released earlier this week, though at a slower pace than in April.

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