The U.S. economy added 253,000 private, non-farm jobs in May, according to the monthly employment report released this morning by payroll-management firm ADP and its partner Moody's Analytics. The seasonally adjusted result is a 45 percent increase from April's downwardly revised 174,000 jobs, and a 336 percent increase over the previous May, when only 58,000 jobs were created. Last month's report marks the fifth consecutive month of growth in the labor market, and the largest addition of jobs month-over-month in 2017.
“Job growth is rip-roaring. The current pace of job growth is nearly three times the rate necessary to absorb growth in the labor force," said Mark Zandi, chief economist of Moody’s Analytics, in a press release. "Increasingly, businesses’ number one challenge will be a shortage of labor.”
Small businesses—those that consist of one to 49 employees—added 83,000 jobs. Within that figure, firms that employ fewer than 20 people added 38,000 jobs, and firms that have 20 to 49 employees added 45,000 jobs. For the second month, mid-sized businesses—those that consist of 50 to 499 employees—saw the biggest employment gains, adding 113,000 jobs and accounting for 44 percent of new jobs. Twenty-two percent (57,000) of payroll additions in April occurred at large businesses—those that consist of more than 500 employees.
Eighty-one percent of May's job gains can be attributed to the service-providing sector's addition of 205,000 jobs, marking the third month that continued growth in the sector has been the anchor of ADP's job report. The service-providing sector includes jobs in trade, transportation, and utilities; information; financial activities, professional and business; education and health; leisure and hospitality; and other services. Five of those seven subsectors experienced growth in May, with information services and leisure and hospitality services reporting the only losses.
The professional and business services sector—which includes architecture and engineering firms—has been on an upward trajectory since March. The addition of 88,000 jobs in May accounts for 43 percent of all new jobs added in the service-providing sector during the month.
The goods-producing sector, which includes jobs in natural resources and mining, construction, and manufacturing, added 48,000 jobs in May, with payroll additions in the construction industry accounting for 77 percent of the sector's total. May's gains in construction mark a rebound from April, when employment decreased by 7,000 (according to ADP's revised data, which came in even lower than the preliminary 2,000 jobs lost reported last month).
“May proved to be a very strong month for job growth,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute in the press release. “Professional and business services had the strongest monthly increase since 2014. This may be an indicator of broader strength in the workforce since these services are relied on by many industries.”
ADP's national employment report is often used as a precursor for the monthly Bureau of Labor Statistics jobs report, for which the April version will be released this Friday. For more information, read the full employment report from ADP.