The private sector experienced a significant uptick in employment during May, with companies adding 122,000 jobs, according to the latest report released by payroll processing firm ADP on Wednesday. This figure notably surpassed economists' projections, which had estimated a gain of 117,000 positions for the month.
The ADP National Employment report for May 2026 also included a revision for the prior month's payrolls. The April job gain was adjusted downward to 105,000, from an initially reported gain of 109,000 new positions.
Leading the job creation in May were education and health services, which collectively added 57,000 positions. Following this, the trade, transportation, and utilities sector contributed 36,000 new jobs, while professional and business services saw an increase of 11,000. The leisure and hospitality sector, alongside construction, each added 8,000 positions during the month.
Further gains were observed in financial activities, which grew by 7,000 jobs. Other services added 4,000 positions, and the manufacturing sector saw an increase of 3,000. However, not all sectors experienced growth; the information sector reported a loss of 9,000 jobs, and natural resources and mining declined by 3,000 positions.
Job Growth Across Business Sizes
Job growth was distributed across businesses of varying sizes. Large businesses, defined as those with 500 or more employees, accounted for 40,000 of the new jobs in May. Mid-sized establishments, employing between 50 and 499 workers, added 17,000 positions. Small businesses, those with fewer than 50 employees, demonstrated significant hiring activity, gaining 67,000 jobs, according to the latest ADP data.
Experts weighed in on the implications of the report. Nela Richardson, chief economist at ADP, commented on the breadth of the hiring, stating, "Hiring was more broad-based in May than we've seen in the last few years." Richardson added that "The labor market continues to show sustained momentum going into the summer hiring season."
Heather Long, chief economist at Navy Federal Credit Union, highlighted the report's positive surprise. "The ADP jobs report for May surprised to the upside with 122,000 private sector job gains, the most since January 2025," Long said. She further noted that while healthcare constituted nearly half of the new jobs, increases were observed across almost every industry, presenting a more favorable outlook for job seekers this summer compared to the previous year.
Long also emphasized the role of smaller firms in the current economic landscape. "The most encouraging news of all is that over half of the job gains were at smaller firms. Small businesses were the first to cut back last year, especially after sweeping tariffs went into effect. The fact they are hiring now is a vote of confidence in the economy."
The ADP data serves as a precursor to the Labor Department's nonfarm payrolls report, which is scheduled for release on Friday morning. The government data is expected to show an increase of 85,000 positions, a figure below the 115,000 reported in April. The divergence between ADP and government figures can sometimes be notable.
