The US May ADP employment data indicates an increase of 122,000 jobs, slightly above the expected 117,000. This figure aligns closely with consensus, suggesting a solid economic foundation in the US.
ADP reported that hiring trends are more widespread than in recent years, demonstrating sustained momentum in the labor market. This report contributes to the week’s positive sentiment following a strong JOLTS report and a favorable ISM manufacturing report.
The ADP National Employment Report tracks monthly changes in private-sector employment based on anonymized payroll data from over 26 million employees. It is released two days before the BLS nonfarm payrolls data, although the two reports do not correlate strongly. The ADP report serves as an independent indicator of employment trends.
In April, private companies added 109,000 jobs, a significant increase from March’s 61,000 and well above the Dow Jones consensus of 84,000. This marked the largest growth since January 2025. However, the internal data revealed a familiar pattern of low hiring and low firing. The education and health services sector led with 61,000 new jobs, followed by trade, transportation, and utilities with 25,000, and construction with 10,000. Manufacturing added only 2,000 jobs despite efforts to reshore, while professional and business services lost 8,000 jobs.
The breakdown by company size showed that small firms (under 50 employees) added 65,000 jobs, and large firms (500 or more) added 42,000, indicating weakness among mid-sized employers. The six-month moving average of job additions remains around 60,000, which is sufficient to keep the Federal Reserve patient regarding interest rate cuts.
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