ADP: More Strong Gains

Bottom Line:   ADP reported better-than-expected hiring again in May, with payrolls rising 278k, well above the consensus estimates looking for 170k. While the magnitude of the gains was remarkably strong and suggests labor markets remain tight, the details offered a few concerns. Education and health services, the second largest segment and a source of higher-paying jobs, saw the biggest declines of this cycle. Manufacturing also saw significant job losses. Moreover, the gains were mostly in the lower-paying leisure and hospitality segment.  Overall, the details of the report were a bit less compelling than the headline. Hiring remained robust, and there is scope for an upside beat in tomorrow's national payroll report (consensus is 195k for nonfarm payrolls).