The latest ADP National Employment Report indicates that US businesses added 122,000 jobs in May, surpassing both the April figure of 105,000 and the Dow Jones consensus estimate of 110,000.
In contrast to recent months where job growth was concentrated in a few sectors like healthcare, the May gains were more broadly distributed across the economy.
Once again, the education and health services sector led the way, adding 57,000 positions. This was followed by trade, transportation, and utilities, which increased by 36,000 jobs. Professional and business services contributed a further 11,000, while both the construction and leisure and hospitality sectors each added 8,000 jobs.
The report from Automatic Data Processing Inc (ADP) on Wednesday showed a steady pace of private sector hiring in May, offering further evidence of a stable labor market.
The payroll processor reported that businesses created 122,000 new jobs last month. This figure represents the strongest monthly job growth since January 2025. The data for April was revised downward by 4,000 jobs.
The expansion was notably more widespread than in prior months. Eight of the ten industries tracked by ADP posted gains, with hiring evenly distributed by company size and geography.
Leading sectors included education and health services with 57,000 new jobs, trade, transportation, and utilities with 36,000, and professional and business services adding 11,000. Both construction and leisure and hospitality saw increases of 8,000 each.
Conversely, the information services sector shed 9,000 jobs, a potential impact of the growth in artificial intelligence, while natural resources and mining reported a loss of 3,000 positions.
Nela Richardson, chief economist at ADP, stated, "Hiring in May was more broad-based than it has been over the past few years. The labor market is showing continued momentum heading into the summer hiring season."
Small businesses with fewer than 50 employees led the hiring, adding 67,000 jobs. Large firms with 500 or more employees increased payrolls by 40,000, while medium-sized businesses contributed 17,000.
Regarding wages, the annual pay growth for workers who stayed in their jobs held steady at 4.4% from April. For those who changed jobs, the rate of pay increase moderated slightly to 6.5%.
This report precedes the official US Bureau of Labor Statistics nonfarm payrolls data for May, due for release in two days. Wall Street generally anticipates an increase of 80,000 jobs for May, following a gain of 115,000 in April, with the unemployment rate expected to remain stable at 4.3%.
Federal Reserve officials will be closely monitoring this employment data ahead of their policy meeting scheduled for June 16-17. Markets have almost fully priced in expectations that the central bank will maintain its benchmark interest rate within the current range of 3.5% to 3.75%.
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