Payroll firm ADP’s latest report shows US employers are holding back on hiring and replacing staff, leading to the first private sector job loss in months.
The US private sector unexpectedly lost jobs in June, according to data from payroll firm ADP on Wednesday, a potential sign of labor market weakening amid uncertainty from President Donald Trump’s tariffs.
Private sector employment declined by 33 000 last month, ADP said, while job growth in May was revised lower to 29 000.
Job losses
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” ADP chief economist Nela Richardson said in a statement.
But she maintained that the hiring slowdown “has yet to disrupt pay growth.”
The losses came about in areas like professional and business services, alongside education and health services.
Other sectors show gains
But sectors like leisure and hospitality, alongside manufacturing, showed gains, ADP said.
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Meanwhile, pay growth held steady, according to the report.
For those who remained in their jobs, annual pay gains were little-changed at 4.4 percent — while increases for those who changed jobs was 6.8 percent in June, slowing slightly.
The ADP figures will be scrutinized ahead of official employment numbers released this week, for signs that the world’s biggest economy is less solid than expected.
Experts warn of early signs of market strain
“This is the first time that we’re seeing the job market disappoint and actually contract in recent months,” said Adam Sarhan from 50 Park Investments.
“And that is worrisome because up until now unemployment has been low and jobs have been strong and growing,” he added.
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