Companies employing more than 499 workers cut their workforces by 19,000 jobs. Medium-sized businesses, with 50 to 499 employees, created 30,000 jobs and small companies increased payrolls by 27,000, ADP said.
Japan Disaster
The drop in manufacturing may reflect supply disruptions caused by the earthquake and tsunami in Japan, Joel Prakken, chairman of Macroeconomic Advisers LLC in St. Louis, which produces the data with ADP, said in an interview on CNBC Television.
Some companies are already looking beyond the temporary slowdown and are making plans to expand payrolls further in 2012. General Motors Co. said last week it will invest $69 million and add 2,500 jobs to start making new models at the Detroit plant that builds the Chevrolet Volt plug-in hybrid as the automaker boosts U.S. production.
Overall payrolls, which include government workers, probably rose by 180,000 in May after climbing by 244,000 a month earlier, according to the median forecast of economists surveyed before the Labor Department's June 3 report.
Federal Reserve officials have said the jobless rate "remains elevated" at 9 percent, one reason central bankers pledged at their last meeting to complete an asset-purchase plan by the end of this month and to keep borrowing costs near zero.
The ADP report is based on data from about 340,000 businesses employing more than 21 million workers.