Private employers added 37,000 jobs in May, the slowest pace of hiring since March 2023, according to the payroll processing firm ADP.
The slowdown in private job creation may be a sign of a weakening labor market. The 37,000 jobs created was a surprise, as the Dow Jones forecast was for 110,000 jobs. In April, the private sector created 60,000 jobs.
The ADP report has put even more pressure on Federal Reserve Chairman Jerome Powell to lower interest rates and stimulate the economy, including fresh attacks from President Donald Trump, who has in the past referred to Powell as a “major loser” for his reticence to lower rates.
The ADP data arrives two days before the U.S. Bureau of Labor Statistics releases a more complete jobs report that is predicted to show a gain of 125,000 jobs and a steady unemployment rate of 4.2%, according to CNBC.
ADP found that small businesses with 1 to 19 employees lost 6,000 jobs. Businesses with 20 to 49 employees eliminated 7,000 jobs. Mid-sized companies with 50 to 249 employees saw the only rise in employment, adding 51,000 positions. Larger companies with 250 to 499 employees lost 2,000 jobs. Large companies with more than 500 employees cut 3,000 jobs.
The professional and business services sector was the biggest loser, eliminating 17,000 positions. It was followed by education and health services, which cut 13,000 jobs. Trade, transportation and utilities lost 4,000 jobs, while manufacturing employment fell by 3,000.
Sectors gaining jobs included leisure and hospitality, which added 38,000 positions, and financial activities, which saw an increase of 20,000 workers.
ADP data found that workers staying in their current job saw a median increase in annual pay of 4.5%. For those changing jobs, the median salary increase was 7%.
“After a strong start to the year, hiring is losing momentum,” Nela Richardson, ADP’s chief economist, said in a statement. “Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers.”
The news of the weak job report led to a fresh round of early-morning rants from Trump on his Truth Social site, in which he demanded that the Fed chair lower interest rates immediately.
“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!” Trump wrote on the social media site.
The two have been at odds over rates for months, as Trump has been open about his irritation with the Fed chair’s cautious approach, even mulling whether to try to fire him from his position. The two met at the White House last week to discuss their positions, with CNBC reporting that readouts revealed the meeting turned confrontational.
Trump reportedly told Powell that the Fed chair was making a mistake by not lowering interest rates, which the president claimed is putting the U.S. at an economic disadvantage to China and other countries. The Fed reported that Powell told Trump that monetary policy must be guided by objective economic data, not politics.
