The US private sector labor market recorded strong growth in May 2026 with an addition of 122,000 jobs. The latest report from payroll processing firm ADP exceeded Wall Street's initial expectation of 110,000, marking the fastest hiring performance since early last year.
In contrast to previous market trends, the momentum of job growth this time is broad-based and no longer solely dependent on just one sector. Eight of the ten major industry categories recorded expansion, providing a positive sign that companies in the US are preparing their operations for the summer hiring season.
The education and health services sector remained the main developers, contributing 57,000 new jobs. However, a significant contraction was detected in the information services industry, which lost 9,000 positions, a trend that analysts assessed as a direct impact of the aggressive absorption of artificial intelligence (AI) technology by the corporate sector.
In terms of wage growth, workers who kept their jobs enjoyed a steady annual wage increase of 4.4%. However, for workers who chose to change companies, the wage growth rate was reported to have slowed slightly to 6.5%. This suggests that employers are now starting to reduce excessive premium incentives to attract new talent.
The strong ADP data was released two days before the official Nonfarm Payrolls (NFP) report from the US Department of Labor. This resilient economic indicator is expected to be a critical input for Federal Reserve (Fed) officials in maintaining the benchmark interest rate at 3.5% to 3.75% at its mid-June policy meeting.
