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ADP Employment: Continued Strong Gains

June 3, 2021
Bottom Line:   ADP reported jobs in leisure and hospitality accounted for nearly half of the 978k jobs added in May.  While there were negative revisions to prior months' data, the report was still better than expected.  Education and healthcare jobs grew notably, as did those in the trade and transportation sector. Manufacturing and construction jobs were also robust.  Overall, the report was solid, leaving the potential for strong gains in the national employment report due Friday.  With the caveat that volatility will remain and the confidence interval associated with any predictive models is wide, this ADP report suggested an upside risk to the current 655k consensus forecast for nonfarm payroll gains in May.
ADP National Employment ROSE by 978k in May, compared with the consensus estimate for a gain of 650k. Meanwhile, the revisions to the prior 3 months subtracted an additional 134k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 754k per month, lifting employment to 8.0% ABOVE its year-ago level.
Jobs in Goods-Producing Industries
ROSE by 128k jobs as Manufacturing gained 52k workers. Moreover, Construction gained 65k jobs.
Service-Producing Industries ROSE by 850k jobs with Professional/Business Services hiring 68k workers, Trade/Transport/Utilities adding 118k, and Financial Activities increasing by 20k workers.
Small Firms hired 333k workers, Medium-Sized Firms grew by 338k employees while Large Firms added 308k positions.