ADP Report Shows Increase in Jobs

Private-sector employment rose by 40,000 jobs last month, boosted by an expanding services industry and small-business sector, according to ADP's(ADP Quote) monthly jobs report released Wednesday.

However, the weak housing market and manufacturing industry continued to take its toll on employment. The construction sector lost 13,000 jobs last month, and has cut a total of 298,000 jobs since its peak in August 2006 as the housing market has declined. Manufacturers slashed 26,000 jobs, the 21st consecutive monthly drop.

While May's results are "above consensus forecasts of an outright decline, it nevertheless suggests continued weakness in employment," said Joel Prakken, chairman of Macroeconomic Advisers, which puts out the monthly report in conjunction with ADP.

As large- and medium-size firms slashed 21,000 jobs, small businesses took up the slack, adding 61,000 jobs. Prakken called the trend "consistent with the stronger growth and resiliency" that small businesses have shown over the past several years.

The services industry added 77,000 jobs, while the goods-producing sector cut 37,000.

ADP also revised earlier data to say that 13,000 jobs had been added in April -- 3,000 more than it initially estimated.

ADP is a business-outsourcing company that processes payrolls. The Labor Department is set to release its employment report on Friday.