Employment in the US private sector increased more than expected in May, ADP (ADP) data showed Wednesday, ahead of the official jobs report for the month due later in the week.
Private jobs advanced by 122,000 last month, according to the payrolls processing firm. The consensus was for a 120,000 increase in a Bloomberg-compiled survey. The number of jobs added in April was revised down to 105,000 from 109,000.
"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."
The services sector added 114,000 jobs last month, led by a 57,000 jump in education and health services, ADP said. The information sector saw a 9,000 drop in roles. Employment in the goods-producing sector grew by 8,000.
"The breadth of gains was encouraging, with almost all sectors increasing payrolls during the month," Oxford Economics Senior US Economist Matthew Martin said in remarks emailed to. "Coupled with weak labor supply growth, the strong gains in payrolls would reduce the upside risk to the unemployment rate."
Data from the Bureau of Labor Statistics are expected to show Friday that the US economy added 85,000 nonfarm jobs in May, which would represent a fall from a 115,000 increase reported for April, according to a Bloomberg-compiled survey. The unemployment rate is seen unchanged at 4.3%.
Annual wage growth slowed to 6.5% in May from 6.6% in April for job changers, while compensation gains were steady at 4.4% for job stayers, the ADP report showed.
The ADP report is "slightly at odds" with the Job Openings and Labor Turnover Survey released Tuesday, according to Martin. That survey showed job openings hitting their highest level in almost two years in April, although hiring and layoffs fell.
"While the full impacts of the war in Iran on the labor market haven't fully fed through, recent labor market data will allow the Federal Reserve to be patient in setting policy and remain on hold until December," Martin said.
US President Donald Trump reportedly said in a podcast with the New York Post that Iran has agreed not to have nuclear weapons, but Tehran could still change its mind. Previously, Trump said in a social media post that negotiations with Iran were continuing, despite state-affiliated outlet Tasnim reporting that Iran had suspended talks with Washington.
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