Restaurants lead hiring at franchise firms in May

NEW YORK (AP) — Franchises that serve consumers are doing the most hiring, according to a report released Thursday.

Restaurant franchises added nearly 14,000 jobs during May, payroll provider ADP and Moody's Analytics said in their first report on employment at franchise companies. The gain was by far the largest for any of the 16 segments that the report tracked. Second was business service franchises, which includes consumer-related franchises such as travel agents. They added 2,530 jobs, followed by food retailers with 1,080.

The report reflected the uneven economic recovery, said Mark Zandi, Moody's chief economist, in an interview with The Associated Press. He said businesses that serve consumers are hiring because consumer spending has remained strong this year even though workers got a 2 percent tax hike when Social Security tax rates went up on Jan. 1.

Consumers are likely feeling more secure because of gains in the stock and housing market, he said.

All told, franchises added 19,160 jobs last month. That included hiring at new franchises and existing franchises that were expanding. Franchise companies, which sell everything from fast food to lawn services to home health care, employ a total of about 8 million people, Zandi said.

Employment fell slightly in several franchise categories, including education companies, which lost 940 jobs, and professional services, which lost 710.

ADP and Moody's said they plan to issue the report on franchise employment monthly. The report is compiled from data provided to ADP by its franchise customers. The payroll company also issues monthly reports on employment at all its business customers, and a separate report on small business employment.

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