Private hiring grew faster than expected in May, signaling continued stability in the U.S. labor market, according to a report released Wednesday by ADP.
The payrolls processing firm said companies added 122,000 workers for the month, up from 105,000 in April and better than the Dow Jones consensus estimate for 110,000.
May marked the strongest month for private hiring since January 2025, while April’s total was revised down by 4,000 from the previously reported figure.
Unlike prior months where job growth was concentrated in healthcare and a few sectors, gains in May were more broad-based across the economy.
Eight of the 10 sectors ADP tracks saw gains, with hiring spread evenly both by company size and geography throughout the country.
Education and health services led all sectors with 57,000 new hires, while trade, transportation and utilities added 36,000 jobs during the month.
Professional and business services contributed 11,000 new positions, and construction along with leisure and hospitality each rose by 8,000.
Information services lost 9,000 jobs, a possible impact from artificial intelligence growth, while natural resources and mining reported a loss of 3,000 positions.
“Hiring was more broad-based in May than we’ve seen in the last few years,” ADP chief economist Nela Richardson said. “The labor market continues to show sustained momentum going into the summer hiring season.”
Companies with fewer than 50 employees led hiring with 67,000 new workers, while firms with 500 or more employees added 40,000 and medium-sized firms contributed 17,000.
Annual pay rose 4.4% for workers staying in their jobs, matching April’s rate, while job-switchers saw pay growth edge down to 6.5%.
Stock market futures were mixed following the release while Treasury yields moved higher in early trading Wednesday morning.
The report arrives two days ahead of the Bureau of Labor Statistics’ nonfarm payrolls release for May, with Wall Street expecting growth of 80,000 after April’s 115,000.
The unemployment rate is expected to hold steady at 4.3%, with Federal Reserve officials closely watching the data ahead of their June 16-17 policy meeting.
Markets are pricing in a virtual certainty that the central bank will hold its benchmark interest rate in a range between 3.5% and 3.75%.
