US private sector employers hired in May at the fastest pace of any month during Donald Trump’s second term, ADP data released on Wednesday suggested.
Net hiring outside of government was 122,000 last month, according to the payroll processor’s closely-watched report. That was ahead of estimates and strong enough to reinforce sundry “resilient” labor market narratives.
The prior month’s pace, which itself counted as the best of “Trump 2.0,” was revised slightly lower to reflect a 105,000-net addition.
The three-month average is now 96,000, the strongest since last year’s tariff blitz undercut hiring momentum.
Nela Richardson, ADP’s chief economist, was unequivocal. “Hiring was more broad-based in May than we’ve seen in the last few years,” she said. “The labor market continues to show sustained momentum going into the summer hiring season.”
A quick look under the hood — and that’s all you need for this particular release — suggests very little in the way of bear spin opportunities.
As ADP noted right up front, “eight out of 10 supersectors showed gains,” and every size category added jobs. The “poles” (so to speak) showed the strongest hiring impulse: The smallest employers added 49,000 new workers, the largest 40,000.
Education and health services led gains by sector. Only mining and information showed a net loss. (If your only skills are Excel and gold panning, I guess you were out of luck last month.)
The figures came on the heels of a JOLTS report showing a dramatic jump in overall job openings in April led by professional and business services and ahead of Friday’s all-important BLS release covering May.
“The ADP data points to a broad-based pickup in private hiring despite the ongoing headwinds faced by the labor market,” BMO’s Vail Hartman remarked. “For now, the momentum suggests the US economy may be in a strong enough position to weather a fresh round of inflationary pressures and geopolitical uncertainty.”
As alluded to in H’s commentary yesterday’s JOLTS report: how many of these positions are temporary, associated with the ML data annotation craze?
An acquaintance of mine is earning excellent income “labeling” user experience design tasks. The UX sub-field of software development is something that is rarely done well and requires a genuine combination of talent, skill, and human-centered thinking that’s often at odds with the prevailing mindset of tech employees. Exceptional UX designers – which includes my friend – are hard to find, and here he is helping to automate the very things that make him distinctive.
My acquaintance is aware that he’s helping to automate away his old career, but enjoying the income in the meantime and broadening his skillset to focus on things entirely outside of the domain of software. Would that all of these annotation experts were so forward-thinking!
That’s a glimpse of the obvious “AI replacement” bear case for interpreting these job numbers. I’m unconvinced that the labeling/annotation trade accounts for a significant chunk of the jobs, but they are certainly squarely in the “business and professional services” segment of the job market.