Employment in the US private sector rose by 278,000 jobs in May, according to the ADP National Employment Report released today. The report also found that annual pay growth slowed.

The median change in annual pay for those changing jobs was 12.1%, down one percentage point from April. For those staying in their jobs, the median change in annual pay was 6.5% in May, down from 6.7%.

“This is the second month we’ve seen a full percentage-point decline in pay growth for job changers,” said Nela Richardson, chief economist at ADP. “Pay growth is slowing substantially, and wage-driven inflation may be less of a concern for the economy despite robust hiring.”

The report also found that small businesses with not more than 49 employees added 235,000 jobs in May, while midsize businesses with 499 employees gained 40,000 jobs. However, large businesses with 500 or more employees lost 106,000 jobs.

Employment growth by industry:

• Goods-producing, up 110,000
  • Natural resources/mining, up 94,000
  • Construction, up 64,000
  • Manufacturing, down 48,000
• Service-providing, up 168,000
  • Trade/transportation/utilities, up 32,000
  • Information, down 15,000
  • Financial activities, down 35,000
  • Professional/business services, down 5,000
  • Education/health services, down 29,000
  • Leisure/hospitality, up 208,000
  • Other services, up 12,000

Total jobs added in April was revised downward to 291,000 from 296,000.

The ADP National Employment Report, produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab, uses ADP’s anonymized and aggregated payroll data of more than 25 million US employees to provide a representative picture of the labor market. The report details the current month’s total private employment change and weekly job data from the previous month.