Numbers: US private sector employment jumped 978,000 in May, according to the ADP’s national economic report released Thursday. The gain was well above forecasts by economists polled by the Wall Street Journal who had expected a gain of 680,000 jobs.
It’s the largest monthly gain since last June, when the economy began to reopen after the first wave of the coronavirus pandemic. The private sector added a revised figure of 654,000 in April, down from the previous estimate of 742,000.
Big picture: Economists expect a rebound in the Department of Labor’s nonfarm payrolls, expected on Friday, after a surprisingly moderate gain of 266,000 in April on a seasonally adjusted basis.
The Federal Reserve’s Beige Book reported on Thursday that businesses were increasing payrolls at a steady pace in May.
The ADP survey has historically been a poor month-to-month indicator of the government’s official jobs report, but they’re both moving in the same direction this year.
Economists predict an overall increase of 671,000 new jobs in May in Labor Department data due Friday. The tally, which will be released Friday at 8:30 a.m. EST, also includes government employees.
What happened: In ADP data, the services sector took the lion’s share of May’s increase, adding 850,000 jobs. The goods-producing sector added 128,000. Manufacturing businesses added 52,000 workers.
Hiring was up in all areas. Large companies added 308,000 new employees. Medium-sized businesses held 338,000 jobs. And small businesses hired 333,000 people.
What do they say? “May’s gain in the ADP measure of private employment would seem to throw cold water on the idea that widespread labor shortages continue to weigh on hiring,” said economist Andrew Hunter. senior American at Capital Economics.
Market reaction: DJIA Stocks,
opened sharply lower on Thursday after making small gains in trading the previous day.