Survey: Jobs up 253,000 in May

Data drawn from private firms only

WASHINGTON — U.S. private businesses added a robust 253,000 jobs in May, a private survey found, a sign that employers expect economic growth to keep plowing ahead.

Payroll processor ADP said Thursday that the hiring primarily came from companies with fewer than 500 employees, accounting for more than 75 percent of the jobs added last month. Total hiring is up from 174,000 jobs in April that the survey cited, and nearly matched the 255,000 jobs added in March.

The strong gains all point to a falling unemployment rate. This is because the hiring exceeds the roughly 80,000 people who enter the job market each month, said Mark Zandi, chief economist at Moody’s Analytics. With hiring at the current pace, companies are choosing among a shallower pool of job seekers — which may cause many firms to raise pay to attract talented workers.

“Labor shortages are quickly becoming businesses’ No. 1 problem — and that problem is only going to get worse,” said Zandi, who expects that the government’s 4.4 percent unemployment rate could soon fall below 4 percent.

“Job growth is rip-roaring,” Zandi said.

U.S. stocks rose to fresh records Thursday as the spike in private hiring data bolstered optimism in the economy. The Standard & Poor’s 500 index and the Dow Jones industrial average closed at alltime highs.

The ADP jobs figure is much higher than economists’ forecasts for the Labor Department’s May jobs report that will be released today. Analysts predict that report will show 176,000 jobs were added, according to data provider FactSet.

ADP’s figures can vary widely from the government’s. The ADP survey covers only private businesses and often diverges from official figures.

The job gains in the ADP survey were led by big increases in construction, education and health and in professional and business services, which include high-paying fields such as accounting and engineering.

Construction hired 37,000 workers, and manufacturers 8,000. Professional and business services added 88,000 jobs, and the education and health sectors contributed 54,000 jobs.

But the leisure and hospitality sector — usually a major source of job gains in the government report — shed 11,000 workers last month in the ADP survey.

Federal Reserve monetary policymakers are watching the labor market closely to determine whether the economy is strong enough for another increase in a key short-term interest rate.

Fed officials have indicated they are on track for a small rate increase this month if the labor market continues to show solid growth.

The ADP report pointed in that direction, as did the weekly unemployment claims figures released Thursday by the Labor Department. Although initial claims for unemployment insurance increased last week to 248,000, the figure remains low and consistent with a healthy labor market.