A report released by payroll processor ADP on Thursday showed private sector employment in the U.S. spiked by much more than expected in the month of May.

ADP said private sector employment soared by 978,000 jobs in May after surging by a downwardly revised 654,000 jobs in April.

Economists had expected private sector employment to increase by 650,000 jobs compared to the addition of 742,000 jobs originally reported for the previous month.

The jump in May reflected the strongest job growth since private sector employment skyrocketed by 4.350 million jobs in June of 2020.

“Private payrolls showed a marked improvement from recent months and the strongest gain since the early days of the recovery,” said Nela Richardson, chief economist at ADP.

She added, “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.”

The report showed employment in the service-providing sector shot up by 850,000 jobs in May, with a jump of 440,000 leisure and hospitality jobs leading the way higher.

Employment in the goods-producing sector also climbed by 128,000 jobs, reflecting job growth in both the construction and manufacturing sectors.

ADP also said large businesses added 308,000 jobs during the month, while employment at small and midsized businesses increased by 333,000 jobs and 338,000 jobs, respectively.

On Friday, the Labor Department is scheduled to release its more closely watched monthly jobs report, which includes both public and private sector jobs.

Economists currently expect the report to show employment jumped by 664,000 jobs in May after climbing by 266,000 jobs in April. The unemployment rate is also expected to dip to 5.9 percent from 6.1 percent.

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