Analysts believe the labor market slowdown is due to ongoing trade uncertainty, cautious hiring, and a reluctance to replace departing workers
Private sector jobs fell by 33,000 last month, marking the first monthly decline since March 2023, according to payroll firm ADP. The drop surprised analysts who had expected a gain of over 100,000 jobs last month.
While ADP’s data doesn’t always mirror the Department of Labor’s figures, it signals a clear slowdown in hiring momentum.
What’s behind the drop?
Analysts believe the labor market slowdown is due to ongoing trade uncertainty, cautious hiring, and a reluctance to replace departing workers.
The ADP report shows that jobs in professional and business services declined by 56,000, while those in education and healthcare lost 52,000. A 32,000-job gain in the manufacturing sector partly offset these losses.
Who was hit the hardest?
Small businesses, especially those with fewer than 20 employees, lost 29,000 jobs. In contrast, large companies with over 500 workers added 30,000 roles.
What’s next?
All eyes are now on the Department of Labor’s official June jobs report, which is due Thursday. Economists predict 115,000 new jobs and an uptick in unemployment to 4.3%, according to CNN.