Payroll processor ADP said Thursday that the hiring primarily came from companies with fewer than 500 employees, which accounted for more than 75 percent of the jobs added last month.
On Thursday, Fed Governor Jerome Powell signaled the US economic expansion warrants further rate hikes as it approaches full employment and inflation is moving closer to the Fed's 2-percent goal. The total hiring is up from 174,000 jobs in April and the 255,000 jobs added in March.
Wall Street stocks were mostly higher early Thursday following data showing a strong pickup in United States private-sector hiring in May.
The dollar rallied on Thursday after a report showed the US economy created more private sector jobs than expected in May, bolstering expectations for an interest rate hike this month. The report raised expectations for Friday's Department of Labor May employment report.More news: The NBA's biggest stars share the spotlight with their brothers
Hiring at private US employers increased last month at the fastest pace since 2014, another sign the nation's labor market remains strong.
Minutes of the Fed's May 2-3 policy meeting, which were published last week, showed that while policymakers agreed they should hold off hiking rates until there was evidence the growth slowdown was transitory, "most participants" believed "it would soon be appropriate" to raise borrowing costs.
Forecasts from Fed officials suggest that a median of two more hikes are planned before the end of the year.
The job gains in the ADP survey were led by big increases in construction, education and health, and professional and business services, which includes high-paying fields such as accounting and engineering.More news: Seeded Kerber loses in first round of French Open
It was the 117th straight week that claims were below 300,000, a threshold associated with a healthy labour market.
On Thursday, we got the first two labor market data points of the week, with the highlight coming from research institute ADP. The four-week average, a less volatile figure, rose 2,500 to 238,000.
The Fed said on Wednesday in its Beige Book report of anecdotal information on business activity collected from contacts nationwide that labour markets continued to tighten from early April through late May. Mining has been one of the cornerstones of President Donald Trump's economic agenda, though critics doubt he can fulfill campaign promises to bring jobs back to the industry. Those companies reduced their payrolls by 11,000 last month after adding 41,000 net new jobs in April.More news: Owner says Three Mile Island plant to shut down in 2019