Payrolls at U.S. firms rise by the most in nearly a year, ADP data show

The stronger pace of hiring suggests companies are having greater success filling open positions as the removal of pandemic-related restrictions and increased social activity spur demand.

Last month, federal health officials reconsidered mask guidance for vaccinated Americans and states moved away from restrictions on businesses. The ADP data precede Friday’s monthly jobs report, which is currently forecast to show the economy added 600,000 private-sector jobs in May.

“While goods producers grew at a steady pace, it is service providers that accounted for the lion’s share of the gains, far outpacing the monthly average in the last six months,” said Nela Richardson, ADP’s chief economist, in a statement.

Employment rose by 128,000 in goods-producing industries and 850,000 among service providers. The largest payrolls gain was in leisure and hospitality, which posted a 440,000 jump from a month earlier, also the largest advance in 11 months.

Payrolls rose by 119,000 in health care; 65,000 in construction; and 68,000 in business services.

Hiring was consistent across all business sizes, including a 333,000 gain at small businesses.

ADP’s payroll data represent companies employing almost 26 million workers in the U.S.