Hiring by U.S. companies increased more than expected in May, pointing to a labor market that remains tight even in the face of higher interest rates, according to the ADP National Employment Report released Thursday morning. 

Companies added 278,000 jobs last month, easily beating the 170,000 gain that economists surveyed by Refinitiv predicted. It is slightly below the revised 291,000 figure recorded last month.

The data precedes the release of the more closely watched May jobs report on Friday morning, which is expected to show that employers hired 190,000 workers following a gain of 253,000 in April. The unemployment rate is expected to inch higher to 3.5%.

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