Private sector added 122K jobs in May

Employment in the private sector grew by 122,000 jobs last month, payroll giant ADP reported Wednesday, in a positive sign for the economy despite rising inflation and fears of artificial intelligence displacing entry-level positions.

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The service-providing sector added 114,000 jobs in May, including 11,000 in professional and business services such as accounting and tax preparation, and 7,000 in financial activities such as banking. The goods-producing sector added 8,000 jobs, mostly in the construction and manufacturing industries, making up for job losses in the natural resources and mining industries.

Small businesses added 67,000 jobs in May, including 49,000 in businesses with between one and 19 employees, and 18,000 in companies with between 20 and 49 employees. Medium establishments gained 17,000 jobs, including 10,000 in businesses with between 50 and 249 employees and 7,000 in organizations with between 250 and 499 employees. Large establishments with 500 employees or more added 40,000 jobs last month.

Year-over-year pay growth for employees who stayed at their jobs held steady at 4.4%. For job changers, the pace of growth slowed a bit to 6.5% in May compared to 6.6% in April. In the professional and business services sector, the rate of pay growth for job stayers was 4.1%.

The job gains were broad-based across firm sizes, according to ADP chief economist Nela Richardson, but small firms are leading the charge this spring. “These job gains did not come at the expense of a big pickup in wage growth,” she added during a conference call Wednesday with reporters. “We’re seeing wage growth be solid but steady.”

However, 42% of the jobs created in May were only part-time. “That’s a higher share than we were tracking five years ago,” she added, “and so while this is an overall solid jobs report, the makeup of these new jobs tends to be more part-time than they were five years ago.”