Payrolls at US firms rise most in nearly a year, ADP data show

[WASHINGTON] US businesses in May added the most jobs in nearly a year, suggesting companies are making headway filling a record number of vacancies as the economy strengthens.

The 978,000 increase in private payrolls was the largest since June 2020 and reflected a large pickup in hiring in the leisure and hospitality industry, according to ADP Research Institute data released Thursday.

The median projection in a Bloomberg survey of economists called for a May increase of 650,000. April employment was revised down to a 654,000 gain.

The stronger pace of hiring suggests firms are having greater success filling open positions as the removal of pandemic-related restrictions and increased social activity spurs demand. A separate government report showed applications for unemployment benefits fell for a fifth straight week, highlighting continued improvement in the job market.

Last month, federal health officials reconsidered mask guidance for vaccinated Americans and states moved away from restrictions on businesses. The ADP data precede Friday's monthly jobs report, which is currently forecast to show the economy added 600,000 private-sector jobs in May.

"While goods producers grew at a steady pace, it is service providers that accounted for the lion's share of the gains, far outpacing the monthly average in the last six months," Nela Richardson, ADP's chief economist, said in a statement.

Employment rose by 128,000 in goods-producing industries and 850,000 among service-providers. The largest payrolls gain was in leisure and hospitality, which posted a 440,000 jump from a month earlier, also the largest advance in 11 months.

Payrolls rose by 119,000 in health care, 65,000 in construction and 68,000 in business services.

Hiring was consistent across all business sizes, including a 333,000 gain at small businesses.

BLOOMBERG