A Wingets restaurant displays a sign that reads “Now Hiring” on June 1, 2021 in Tampa, Florida, United States.
Octavio Jones | Reuters
Private employment growth for May accelerated the fastest in nearly a year as companies hired nearly a million workers, according to a report by payroll firm ADP on Thursday.
The total new hires were 978,000 for the month, a huge jump from 654,000 in April and the largest increase since the 4.35 million added in June 2020 when the economy ended the Covid-19 lockdown. Economists polled by Dow Jones had searched for 680,000.
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 a forerunner to the more closely monitored outside-farm payroll released by the Department of Labor on Friday. However, the two numbers can sometimes differ significantly, like in April when the official census only showed 266,000 new jobs, compared to estimates of one 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 rebound 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%.
Become a smarter investor with CNBC Pro.
Get stock picks, analyst calls, exclusive interviews and access to CNBC TV.
Sign up to start a free trial today.