Personal job growth accelerated the fastest in nearly a year in May, as companies hired 978,000 people, according to a report by payroll firm ADP on Thursday.
It was a big jump from April’s 654,000 and the biggest gain since the 4.35 million added in June 2020 when the economy came out of Covid-19 lockdown. Economists polled by Dow Jones had searched for 680,000 in May.
The April grand total has been revised significantly down from the originally reported 742,000.
ADP’s private payroll, conducted in partnership with Moody’s Analytics, serves as the precursor to Friday’s outside-farm payroll data, which the Department of Labor was closely monitoring. However, the two numbers may differ significantly, as in April when the official census only showed 266,000 new jobs, compared to expectations of a million.
“Personal payrolls showed a marked improvement over the past few months and the largest increase since the early days of the recovery,” said Nela Richardson, chief economist at ADP.
The ADP numbers showed a boom in the leisure and hospitality professions. In a sustained recovery in the industry, hardest hit by the government-induced lockdowns, the sector created 440,000 new jobs in the month.
Education and health services added 139,000, with most from the health sector, while commerce, transportation and utilities added 118,000. 68,000 new employees were hired for professional and business services, while the other services category included 69,000.
On the goods side, the number of people employed in construction rose by 65,000 and in manufacturing by 52,000.
In total, services accounted for 850,000 jobs and goods production accounted for the rest of 128,000.
The job growth was almost perfectly distributed even according to company size, with medium-sized companies with 50-499 employees contributing 338,000. Small firms hired 338,000 and large firms 308,000.
“Businesses of all sizes saw job growth spike, reflecting the improving nature of the pandemic and the economy,” said Richardson.
The official non-farm workforce is expected to show growth of 671,000 in May, bringing the unemployment rate down to 5.9%.
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Correction: Personal payrolls rose 978,000 in May, according to a report from payroll company ADP. In a previous version the number was incorrectly specified