Broad-based hiring across eight sectors points to labor market resilience ahead of the Fed's June rate decision
The US private sector added 122,000 jobs in May, its strongest showing since January 2025, surpassing Wall Street forecasts. The latest figures from the ADP National Employment Report reveal a labor market that, for now, is holding its ground.
The result beat the Dow Jones consensus of 110,000 and improved on April's revised total of 105,000, which was revised down by 4,000.
ADP produces the report in collaboration with the Stanford Digital Economy Lab, drawing on anonymized payroll data from more than 26 million private-sector employees.
"Hiring was more broad-based in May than we've seen in the last few years," said Dr. Nela Richardson, chief economist at ADP.
"The labor market continues to show sustained momentum going into the summer hiring season."
Gains spread across sectors and company sizes
Eight of the 10 supersectors ADP tracks posted gains in May. Education and health services led with 57,000 new roles, but the breadth was notable: trade, transportation, and utilities added 36,000; professional and business services contributed 11,000; and construction and leisure and hospitality each rose by 8,000.
Information services shed 9,000, a possible early marker of AI-related displacement, according to Richardson. Natural resources and mining fell 3,000.
Small businesses drove the headline number. Firms with fewer than 50 employees added 67,000 positions combined; large employers with 500 or more workers contributed 40,000; and medium-sized companies added 17,000.
Financial activities, a sector that encompasses many mortgage-adjacent roles, posted median pay growth of 5.1% for job-stayers in May, above the overall 4.4% median.
Pay for job-stayers held steady at 4.4% year-over-year. Job-changer wage growth edged down to 6.5% from 6.6% in April.
Richardson offered a note of caution on composition: "We're seeing the part-time share be over 40% — it's actually 42% in May. That's a higher share than we were tracking five years ago."
What the data means for mortgage brokers
May's figures set the stage for Friday's Bureau of Labor Statistics nonfarm payrolls release. The Wall Street consensus calls for 80,000 new jobs and an unemployment rate steady at 4.3%.
Both readings will inform Federal Reserve deliberations at the June 16–17 policy meeting, where markets price in near certainty the Fed will hold its benchmark rate in a range of 3.5%–3.75%.
That posture dims near-term prospects for rate relief. Following April's strong employment print, mortgage rate expectations stayed elevated through the spring as policymakers reinforced their wait-and-see stance.
Mike Fratantoni, SVP and chief economist at the Mortgage Bankers Association, noted after that data: "There is enough concern about the labor market to keep at least some potential homebuyers hesitant about their own job situation."
A broader hiring picture may help at the margins. But as research on job fears reshaping American homebuying decisions has shown, borrower confidence tracks employment conditions closely, and for many fence-sitters, rate certainty matters more than payroll totals.
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