Private sector employment in the United States eased in May according to data from payroll firm ADP released Thursday, but slowed less than anticipated despite efforts to cool the economy.
Policymakers have been working to rein in persistent inflation by lifting interest rates and easing demand, although there appear to be growing calls from Federal Reserve officials to skip a further rate hike this month.
The US central bank has raised interest rates 10 times since embarking on a campaign last year to lower inflation down to its longer-term target of two percent.
The latest ADP figures showed that job gains slowed to 278,000 last month, more than analysts expected though still down from the revised 291,000 figure in April.
"Job growth is strong while pay growth continues to slow," said ADP in its report.
"This is the second month we've seen a full percentage point decline in pay growth for job changers," the company's chief economist Nela Richardson said.
She added that "wage-driven inflation may be less of a concern for the economy despite robust hiring."
For workers who changed jobs, wage growth stood at 12.1 percent last month, down one percentage point from April.
Those who stayed on saw pay gains of 6.5 percent in May, down from April as well.
While private sector employment gains were boosted by areas like leisure and hospitality, other industries such as manufacturing and finance lost jobs, according to ADP.
Overall, data show that the economy is still "creating jobs at an elevated pace" while unemployment remains historically low, pointing to strength in the labor market, said Rubeela Farooqi, chief US economist at High Frequency Economics.
But the pace of job growth should moderate as the impact of rate hikes ripple through the economy, she added.
The figures come a day ahead of the Labor Department's employment report, which will be closely watched given the bearing it is likely to have on central bankers' policy decisions ahead.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, warned that ADP's private payroll estimate has undershot government numbers by some 319,000 since it introduced new methodology in August last year.
This means the higher-than-expected figure "does not necessarily signal a strong official number" on Friday, he said.