Private employers unexpectedly cut 33,000 jobs in June, the latest signal of an intensifying slowdown in the US labor market.
On Wednesday, data from ADP showed private payrolls fell by 33,000 last month in June, fewer than the 29,000 job gains seen in May and the 98,000 additions expected by economists.
This marked the first month of jobs losses in the private sector since March 2023. May’s initial reading of 37,000 private payroll additions had been the lowest monthly total since March ’23.
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” ADP chief economist Nela Richardson said in the release. “Still, the slowdown in hiring has yet to disrupt pay growth.”
ADP Pay Insights data showed wages for workers who changed jobs grew 6.8% while wages for those who stayed in the same job grew 4.4%. Both were down slightly from the month prior.
The data comes as investors have been closely watching for any signs of cooling in the labor market as debate over when the Federal Reserve will cut interest rates next intensifies. As of Wednesday morning, markets were pricing in at least two interest rate cuts for 2025, up from the one seen just a month prior, per Bloomberg data.
In recent weeks, labor market data has been mixed, with hiring remaining low but the number of Americans filing for continuing unemployment claims ticking higher.
On Tuesday, new data from the Bureau of Labor Statistics showed 7.76 million jobs open at the end of May, an increase from the 7.39 million seen the month prior and the highest level of monthly job openings since November 2024.
But also within the release, both the hiring and quits rates hovered near decade lows, reflecting what economists have described as a labor market in “stasis” as workers aren’t being laid off at concerning levels but many aren’t willingly switching jobs either.
Wednesday’s data comes ahead of another update on the labor market expected for release on Thursday morning. Consensus expects the June jobs report to show hiring slowed further, with nonfarm payroll additions projected to fall to 110,000 and the unemployment rate expected to tick higher to 4.3%.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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