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Private Sector Job Growth Slows to Two-Year Low, ADP Reports

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Adp Jobs Report May 2025

ROSELAND, N.J., June 4, 2025 /PRNewswire/ — Private sector job creation significantly slowed in May, adding just 37,000 positions, according to a report released by payroll processing firm ADP. This figure marks the lowest increase in more than two years and fell short of the revised job count of 60,000 in April and the Dow Jones forecast of 110,000.

The ADP National Employment Report serves as a key indicator ahead of the Bureau of Labor Statistics‘ nonfarm payrolls data, expected to show a gain of 125,000 jobs for May and maintain the unemployment rate at 4.2%.

Nela Richardson, chief economist at ADP, noted, “After a strong start to the year, hiring is losing momentum.” The report reveals a decline in goods-producing industries, with a net loss of 2,000 jobs; manufacturing lost 3,000 jobs, while natural resources and mining shed 5,000 jobs, despite construction gaining 6,000.

On the services side, sectors such as leisure and hospitality (38,000 jobs) and financial activities (20,000 jobs) showed some growth. However, professional and business services saw a decrease of 17,000, and education and health services lost 13,000 positions.

Companies with fewer than 50 employees lost 13,000 jobs, while large firms (those with 500 or more employees) reported a decline of 3,000 positions. Mid-size companies added 49,000 jobs.

Wage growth remained steady, with annual pay increasing at a rate of 4.5% for job holders and 7% for job changers, which Richardson described as “robust” levels.

Economic indicators have been mixed recently, with job openings and hiring intentions revealing a weaker labor market. Indeed economist Allison Shrivastava commented, “The market remains distressingly gridlocked, with limited hiring and low quits.”

Federal Reserve officials have expressed concerns over potential impacts from tariffs imposed by President Donald Trump, affecting both inflation and employment. Fed Governor Lisa Cook emphasized that, although the U.S. economy remains in solid shape, heightened uncertainty poses risks to employment and price stability.

The June 2025 ADP National Employment Report will be released on July 2, 2025.