ADP Reports 253000 New Jobs in May; ‘Rip-Roaring’ Growth
May private sector payroll growth was much stronger than expected. ADP reported 253,000 new jobs created last month, up from just 165,000 forecast by economists.
It was also sharply higher than April’s level of 174,000 (a number that was revised a little lower from 177,000 reported initially).
This report suggests Friday’s non-farm payrolls report, released by the government, could also come in above expectations. Economists forecast around 185,000 new jobs. However, the two reports don’t always correlate.
Mark Zandi, chief economist of Moody’s Analytics called the job growth “rip-roaring.” He notes that the current pace is nearly three times the rate of growth of the size of the labor market. “Increasingly, businesses’ number one challenge will be a shortage of labor,” he says.
Treasury yields rose following the report. The yield on the 10-year note jumped to 2.23% from 2.21% just before the 8:15 a.m. ET release.