The U.S. private sector lost 33,000 jobs in June, according to ADP — the first monthly decline in over two years and a sharp miss compared to economists’ expectations of a 115,000 gain.
Chief economist Nela Richardson said hiring slowed as employers hesitated to replace workers, though layoffs remain rare and wage growth continues.
ADP data often diverges from the official government report, due Thursday, which is expected to show 115,000 job gains and a slight rise in the unemployment rate to 4.3%.
Some economists doubt ADP's results, pointing to an unlikely drop of 52,000 jobs in health care and education, sectors that have been growing.
Markets reacted slightly, with the odds of a July Fed rate cut rising to 25%. Policy uncertainty — including tariffs, federal cuts, and immigration changes — is weighing on hiring confidence.
Despite weak job growth, layoffs haven’t surged. June saw a 49% drop in announced cuts from May, but total layoff announcements this year are the highest since the pandemic, largely due to federal job cuts under the Trump administration’s Department of Government Efficiency.
While federal job losses are small in the bigger picture, other headwinds — from tariffs to high interest rates — could slow the labor market further, economists warn. Photo by Phil Whitehouse, Wikimedia commons.
