ADP Reports 33,000 Decline in Private Sector Jobs in June
First Drop Since March 2023
"Companies Hesitant to Hire New Employees"
Last month, private sector employment in the United States experienced an unexpectedly sharp decline. This marks the first decrease in private employment in two years and three months. Although the labor market has remained relatively resilient despite President Donald Trump's tariff policies, concerns are emerging that the market could weaken faster than anticipated due to companies' reluctance to hire new employees.
On July 2 (local time), U.S. private labor market research firm ADP released its employment report, which showed that private sector payrolls decreased by 33,000 in June.
This is the first time private employment has declined since March 2023, a span of two years and three months. The figure is far below the market expectation of 99,000 and represents a significant deterioration compared to May, when private sector payrolls increased by 29,000?a two-year low.
ADP also revised its May private sector payroll growth downward from 37,000 to 29,000.
By sector, professional and business services lost 56,000 jobs. Education and health services saw a decrease of 52,000, while the financial sector shed 14,000 jobs. In contrast, leisure and hospitality added 32,000 jobs, and manufacturing increased by 15,000.
Wage growth remained solid. For workers who stayed at their jobs for one year, annual wage growth was 4.4%. For job changers, it was 6.8%. Although these figures represent declines of 0.1 percentage point and 0.2 percentage point, respectively, from the previous month, wage growth remains robust.
Nela Richardson, chief economist at ADP, said, "Layoffs remain rare, but companies are hesitant to hire new employees and are not replacing workers who leave, which led to last month's job losses." She added, "However, the slowdown in hiring has not yet affected wage growth."
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