Private sector hiring slowed sharply in May, with employers adding just 37,000 jobs—the smallest monthly gain since March 2023—according to data released Wednesday by payroll provider ADP.
The figure fell below April’s revised total of 60,000 and well under the Dow Jones estimate of 110,000, signaling a potential cooling in the labor market ahead of the U.S. Bureau of Labor Statistics report due Friday. That report is expected to show a gain of 125,000 jobs, with the unemployment rate at 4.2%.
“After a strong start to the year, hiring is losing momentum,” said Nela Richardson, chief economist at ADP.
Job losses in goods-producing sectors included 5,000 in natural resources and mining and 3,000 in manufacturing, partially offset by a gain of 6,000 in construction. Service-providing sectors showed mixed results, with gains in leisure and hospitality (38,000) and financial activities (20,000), but losses in professional and business services (17,000), education and health services (13,000), and trade, transportation, and utilities (4,000).
Small businesses with fewer than 50 employees shed 13,000 jobs, while large firms with more than 500 workers reported a decline of 3,000. Mid-size businesses added 49,000 positions.
Annual pay growth remained steady, increasing 4.5% for job stayers and 7% for job changers, ADP reported.
Following the data release, President Donald Trump posted on Truth Social: “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”
Recent labor market data has sent mixed signals. According to the BLS, job openings rose in April, but other surveys suggest slower hiring and fewer voluntary departures.
“I see the U.S. economy as still being in a solid position, but heightened uncertainty poses risks to both price stability and unemployment,” Federal Reserve Governor Lisa Cook said Tuesday.
According to CNBC, the labor market’s direction remains a key focus for policymakers and business leaders as they assess how long current hiring softness will persist.
