U.S. private salaries rose more than expected in May, indicating that the labor market is only gradually slowing, which could cause the Federal Reserve to keep interest rates raised for some time.
Private payrolls rose by 278,000 jobs last month, according to the ADP National Employment report on Thursday. Data for April was revised down slightly to show 291,000 jobs added instead of 296,000 as previously reported. Economists polled by Reuters had forecast private employment rising by 170,000.
Job growth has slowed from last year's robust rate, but the labor market remains resilient despite a 500 basis point interest rate hike from the Fed since March 2022, when the U.S. central bank embarked on the fastest monetary policy tightening campaign since the 1980s to low inflation.
The government reported on Wednesday that there were 10.1 million job openings at the end of April. There were 1.8 job openings for every unemployed person in April, up from 1.7 in March, and well above the 1.0-1.2 range considered consistent with a balanced labor market.
The ADP report, developed in conjunction with the Stanford Digital Economy Lab, was published ahead of the more comprehensive and closely watched Labor Department Bureau of Labor Statistics jobs report for May on Friday.
According to a Reuters survey of economists, private payrolls may have increased by 165,000 jobs in May. With further gains expected in government jobs, the NFP total was forecast to increase by 190,000 jobs last month after increasing by 253,000 in April.
