The US private sector added 122,000 jobs in May, according to the latest ADP National Employment Report, surpassing economists’ expectations of a 117,000 increase and following a revised April gain of 105,000 jobs [2][3]. The strongest hiring was seen in education and health services (+57,000), trade, transportation and utilities (+36,000), and professional and business services (+11,000). Leisure and hospitality and construction each added 8,000 positions, while financial activities, other services, and manufacturing contributed 7,000, 4,000, and 3,000 jobs, respectively. Conversely, the information sector lost 9,000 jobs and natural resources and mining shed 3,000 [3]. Large businesses (500+ employees) added 40,000 jobs, mid-sized businesses (50-499 employees) gained 17,000, and small businesses (fewer than 50 employees) contributed 67,000 [3].
ADP Chief Economist Nela Richardson commented, “Hiring was more broad-based in May than we've seen in the last few years. The labor market continues to show sustained momentum going into the summer hiring season” [2][3]. The robust private sector employment data supported the US Dollar, which was up 0.16% on the day at 99.38, and was the strongest against the New Zealand Dollar this week (+1.29%) [2].
The upbeat labor market conditions have reinforced expectations that the Federal Reserve may remain focused on controlling inflation, with markets now pricing about a 60% probability of at least one interest rate hike by the end of 2026 [2]. This comes ahead of the official government nonfarm payrolls (NFP) report, forecast to show an increase of 85,000 jobs in May, below the 115,000 reported in April [2][3].
Separately, Standard Chartered economists noted that recent QCEW data validated softer NFP readings in late 2025, when government shutdown effects and DOGE layoffs impacted employment. The QCEW showed employment grew by 1.3% from March to December 2025, slightly higher than NFP growth of 1.2%, suggesting that the overstatement issue in NFP estimates may have lessened since March 2025. The new birth-death model and a stabilizing economic cycle have narrowed the NFP-QCEW gap, increasing confidence in the accuracy of recent labor market data. Monthly NFP has averaged 76,000 since the beginning of 2026, indicating a firmer footing for the labor market [1].
CONCLUSION
US private sector job growth in May exceeded expectations, supporting the US Dollar and reinforcing market confidence in the labor market’s resilience. Analysts note that improved alignment between NFP and QCEW data further validates recent employment trends, while markets await the official NFP report for additional confirmation.