The U.S. economy added nearly a million private sector jobs in May, ADP said Thursday, a much stronger-than-expected total that could stoke concerns for wage inflation as the economy powers ahead in its post-pandemic recovery.
Payroll processing group ADP said in its National Employment Report, which it compiles with Moody's Analytics, that private sector jobs grew by 978,00 last month, well ahead of the Street consensus forecast of a 650,000 total and the strongest monthly figure since September. The final reading for April was revised lower by 182,000 positions to 654,000.
The Bureau of Labor Statistics will publish its official nonfarm payroll report Friday, with economists looking for a headline total that represents around 664,000 million new jobs, following on from April's disappointing 266,000 tally.
“Private payrolls showed a marked improvement from recent months and the strongest gain since the early days of the recovery,” said ADP chief economist Nela Richardson. “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. Companies of all sizes experienced an uptick in job growth, reflecting the improving nature of the pandemic and economy.”
U.S. equity futures were little-changed following the data release, with contracts tied to the Dow Jones Industrial Average indicating an opening bell decline of 205 points and those linked to the S&P 500 priced for a 30 point pullback.
Benchmark 10-year Treasury bond yields, meanwhile, ticked higher, to 1.603%, while the dollar index gained 0.2% against a basket of its global peers to trade at 90.086.