Private sector hiring in the United States slowed significantly in May, with job additions reaching the lowest monthly total in more than two years, according to payroll processing firm ADP.
The report showed that private companies added just 37,000 jobs during the month, well below economists’ expectations and a notable decline from April’s revised figure of 60,000.
The modest job growth contrasted with a consensus forecast of 110,000 new positions, highlighting emerging concerns about the strength of the US labor market amid ongoing economic uncertainties. This report precedes the government’s more closely watched nonfarm payrolls data, due on Friday, for which economists currently predict a gain of approximately 125,000 jobs in May.
The slowdown in hiring has raised questions about the impact of trade policy uncertainties and global tensions on businesses. Manufacturing and natural resources sectors experienced declines, losing a combined total of 8,000 jobs, while construction showed some gains. Services industries such as leisure and hospitality, and financial activities reported modest growth, though losses in professional services, education, and health services weighed on the overall numbers.
President Donald Trump responded to the report by urging Federal Reserve Chairman Jerome Powell to cut interest rates, arguing that monetary policy adjustments were needed to support the economy.
Market reactions were mixed following the report. US stock indexes, including the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite, remained largely flat, reflecting cautious investor sentiment amid the mixed economic signals. Despite this, some market analysts noted that the ADP data tends to be volatile and advised waiting for the official government employment figures before drawing firm conclusions.
Economic indicators have shown a varied picture in recent weeks. While some data point to ongoing resilience in parts of the economy, others suggest a cooling labor market. Job openings have risen according to some reports, but surveys from employment sites and business groups indicate softer hiring intentions and increased uncertainty.
Federal Reserve officials have expressed cautious optimism about the economy but acknowledge risks related to trade tensions and inflation. The central bank is widely expected to hold interest rates steady in its upcoming meeting, closely monitoring labor market developments and broader economic conditions.
CNBC, Market Watch, and Investor’s Business Daily contributed to this report.
