The private sector added 201,000 jobs during the month of May, and it was small businesses leading the way. The Automatic Data Processing payroll firm reported the numbers in its monthly job report. Part of the report stated that 122,000 of the new jobs came from businesses comprised of 50 or fewer employees.
Meanwhile, large companies that employ more than 1,000 workers added just 16,000 jobs during the month of May. ADP also reported that 95% of the new jobs were in the service sector.
Of course, many economists warn against reacting too strongly to ADP’s figures, as the company’s statistics on job growth in April were lower than those released by the Labor Department, which is expected to release its monthly jobs report on Friday.
Despite positive overall job growth, there is some cause for concern, as manufacturing jobs fell by 5,000, making May the third straight month of decline in that sector. Moreover, the continued decline in oil prices is causing harm to the energy sector, which has lost more than 40,000 jobs since its peak last November.
However, the overall job growth has garnered a favorable response from the stock market, with the Dow Jones Industrial Average rising over 50 points during early trading Wednesday. Wall Street analysts are also predicting the continued job growth will force the Federal Reserve to raise interest rates.
Analysts consider the kind of employment growth reported by ADP to be consistent with the growth over the past couple of years. If job growth continues at its current pace, it’s believed that the economy will return to full employment in about a year, as the economy continues to get back on track.