Payroll processor ADP released a report Thursday morning showing that private sector employment in the U.S. increased roughly in line with economist estimates in the month of May.
The report said private sector employment rose by 173,000 jobs in May after climbing by an upwardly revised 166,000 jobs in April.
Economists had expected employment to increase by about 175,000 jobs compared to the addition of 156,000 jobs originally reported for the previous month.
Mark Zandi, chief economist of Moody's Analytics, said, "Job growth has moderated this spring as energy companies and manufacturers shed jobs. Retailers are also more circumspect in their hiring."
"Despite the recent slowdown, job growth remains strong enough to reduce underemployment," he added.
The increase in private sector employment in May reflected job growth in the service-providing sector, which added 175,000 jobs.
ADP said the professional/business services industry contributed 43,000 jobs, while employment in the trade/transportation/utilities industry grew by 28,000 jobs.
Meanwhile, the report said goods-producing employment dipped by 1,000 jobs in May, partly reflecting the loss of 3,000 manufacturing jobs.
Employment at large businesses edged up by 34,000 jobs, while medium and small businesses added 63,000 jobs and 76,000 jobs, respectively.
Friday morning, the Labor Department is scheduled to release its more closely watched monthly employment report.
The report is expected to show an increase of about 158,000 jobs in May, while the unemployment rate is expected to edge down to 4.9 percent.
Analysts have noted the Labor Department data will reflect the impact of a recent strike by Verizon (VZ) workers, which did not affect the ADP data.
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April 24, 2026 15:15 ET Economics news flow was relatively light this week even as the conflict in the Middle East continued, raising concerns for policymakers. In the U.S., spending data, initial jobless claims and pending home sales were the highlights. Business confidence in the biggest euro area economy was in focus in Europe. Inflation data from Japan gained attention in Asia.