TLDR
- ADP data showed 122,000 private sector jobs were added in May, beating the forecast of 117,000–120,000
- April’s private payroll figure was revised down to 105,000 from the originally reported 109,000
- Gains were broad-based across eight of ten industry sectors, led by education and health services
- Job openings hit their highest rate since May 2024 in April, but hiring and the quits rate both slipped
- The Federal Reserve is expected to hold rates in the 3.50%–3.75% range as inflation and the U.S.-Israel-Iran war continue to affect the outlook
Private employers in the U.S. added 122,000 jobs in May, according to payroll processor ADP. The figure came in above the forecasts from both Reuters and Bloomberg, which had expected gains of 117,000 and 120,000 respectively.
ADP Reports US Economy Added The Most Jobs In 16 Months In May https://t.co/8V4hChBsnA
— zerohedge (@zerohedge) June 3, 2026
April’s figure was also revised downward, from 109,000 to 105,000. Despite the revision, the trend points toward a labor market that is holding steady rather than falling apart.
ADP’s report is developed with the Stanford Digital Economy Lab and is published each month ahead of the more closely watched Bureau of Labor Statistics jobs report. The BLS report for May is due Friday.
ADP has historically been an imperfect predictor of the official BLS private payroll numbers. Still, the report is watched as an early signal.
Hiring Broad-Based Across Sectors
One of the more encouraging details in the ADP report was that job gains were spread across eight of the ten industry sectors it tracks. Education and health services led the way.
“Hiring was more broad-based in May than we’ve seen in the last few years,” said Nela Richardson, ADP’s chief economist. “The labor market continues to show sustained momentum going into the summer hiring season.”
Economists at Oxford Economics offered a more cautious read. Senior U.S. economist Matthew Martin noted that both the quits rate and the layoff rate ticked down in April. “Neither employees nor employers are in a hurry to make moves,” he said.
The quits rate is often used as a measure of worker confidence. When it falls, it can suggest workers feel less certain about finding a better job elsewhere.
Job Openings Rise, but Hiring Slips
Tuesday’s Job Openings and Labor Turnover Survey added some mixed signals to the picture. Job openings in April climbed to their highest rate since May 2024, nudging the ratio of vacancies to unemployed workers to its best level since early last year.
However, the gains were concentrated in just one sector: professional and business services. Hiring overall actually declined in the same period.
That disconnect between openings and actual hiring is something economists are watching closely.
What the Fed Is Watching
The labor market has recovered from a softer stretch last year, when tariff-related uncertainty weighed on hiring. Now, a new variable has entered the picture.
The U.S.-Israel war with Iran has pushed up commodity prices and added to inflation pressures. Inflation rose at its fastest pace in three years in April.
Financial markets currently expect the Federal Reserve to hold its benchmark interest rate in the 3.50%–3.75% range through next year. The Fed has signaled it wants to see more data before considering any cuts.
Economists surveyed by Reuters forecast the official May nonfarm payrolls figure will show a gain of 85,000 jobs, down from 115,000 in April. The unemployment rate is expected to hold at 4.3%.
That official figure arrives Friday.
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