Following a steady increase in hiring in the first quarter of the year, small businesses experienced strong hiring growth last month in preparation for the upcoming summer vacation season, according to top 15 accounting firm CBIZ.

The CBIZ Small Business Employment Index (SBEI), which tracks hiring trends among thousands of companies with 300 or fewer employees across the U.S., indicated a seasonally adjusted increase of 2.69% in May—up from 0.29% in April and the fourth straight month of increased hiring.

Graph courtesy of CBIZ.

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The Bureau of Labor Statistics’ recent employment report indicated hiring growth that beat expectations. The May report showed an overall increase of 272,000 private-sector jobs, but the national unemployment rate rose slightly to 4%. The report is inclusive of all non-farm private employers across businesses of all sizes.

Meanwhile, the ADP employment report indicated hiring growth among medium and large-sized companies. Its May analysis showed an overall increase of 152,000 private-sector jobs for the month. Despite overall growth, small businesses experienced a decrease of 10,000 jobs on a seasonally adjusted, month-over-month basis. The ADP report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.

“In general, the May jobs data from the Bureau of Labor Statistics contain many underlying contradictions, which take confidence away from the headline number and its implications about the economy as a whole,” Anna Rathbun, CFA, chief investment officer at CBIZ Investment Advisory Services, said in a statement. “The underlying dispersion in the data paints a picture of an economy utilizing more part-time help. Small businesses may be tapping into the part-time labor market to ensure that their demands are met, despite the complexities of the current labor market.”

In May, 25% of companies in the CBIZ SBEI increased staffing, 60% made no change to their headcounts, and 15% reduced employment totals. Accommodation and food services, administrative and support services, and information sectors saw increases in hiring. However, the financial services and government sectors experienced slower hiring rates, while wholesale distribution observed a decline in hiring.

There were hiring increases seen across all regions in the U.S. last month. The Northeast (4.50%) had the largest employment gain, followed by the Central (2.72%), Southeast (1.52%), and West (0.90%) regions, according to CBIZ.

“Despite the strong headline non-farm payroll number, the underlying data suggests more confusion about the state of the labor market than confirming the strength behind the 272,000 jobs gained,” Rathbun said. “The [Bureau of Labor Statistics] Establishment Survey showed a gain of 272,000 jobs, but the Household Survey reports a loss of 408,000 jobs—a 700,000 difference. This discrepancy, especially with -625,000 losses in full-time jobs and +286,000 gains in part-time jobs, has been the pattern for about a year now, which isn’t great. The gains in the SBEI may be capturing a lot of that part-time payroll.”