Private employers in the U.S. added 122,000 jobs in May, marking the largest monthly gain since January 2025, according to data from payroll processor ADP. The figure exceeded economists' expectations of 110,000 to 120,000 and followed a revised April total of 105,000 jobs. The report suggests sustained momentum in the labor market as the economy approaches the summer hiring season.
Broad-Based Growth Across Sectors
Eight of the 10 sectors tracked by ADP reported gains, with education and health services leading at 57,000 new hires. Trade, transportation, and utilities added 36,000 jobs, while professional and business services contributed 11,000. Construction and leisure and hospitality each saw increases of 8,000. However, information services lost 9,000 jobs, potentially due to artificial intelligence (AI) disruptions, and natural resources and mining declined by 3,000.
Small Businesses Drive Hiring
Companies with fewer than 50 employees led hiring with 67,000 new roles, while firms with 500 or more employees added 40,000 jobs. Medium-sized businesses contributed 17,000. Pay growth remained steady at 4.4% for job stayers and 6.5% for job switchers, though wage increases were modest for workers at the smallest firms. Notably, 42% of new roles were part-time, a higher share than five years ago.
Market and Policy Implications
The report arrives ahead of the Bureau of Labor Statistics' May nonfarm payrolls release, with economists forecasting 80,000 new jobs and an unchanged unemployment rate of 4.3%. Federal Reserve officials will scrutinize the data ahead of their June 16-17 policy meeting, where markets anticipate no rate changes. Treasury yields rose following the ADP report, while stock market futures reacted mixedly.
Mixed Signals in Job Market Stability
While job openings surged in April to their highest level since May 2024, hiring declined, and the quits rate—a measure of worker confidence—slightly decreased. The data suggests a stable but nuanced labor market, with hiring spread across company sizes and regions but with a growing share of part-time roles.