U.S. private sector employers added fewer jobs than expected in May, signaling a potential slowdown in the labor market as businesses navigate ongoing uncertainty tied to President Donald Trump’s tariff policies.
According to the ADP National Employment Report, private payrolls rose by just 37,000 in May, a drop from the downwardly revised 60,000 recorded in April. Economists had forecast a much stronger increase of 111,000 jobs. This marks the weakest reading since March 2023.
“Hiring momentum is slowing after a solid start to the year,” said ADP Chief Economist Nela Richardson in a Wednesday statement.
Despite the dip in job creation, Richardson pointed out that wage growth remained stable and strong for both employees who stayed in their jobs and those who switched positions.
Analysts at Vital Knowledge noted that the ADP data implies that extended policy instability may now be affecting hiring plans, at a time when markets appear overly confident in the economy’s resilience to trade-related disruptions.
Separate figures released Tuesday by the U.S. Labor Department showed an increase in job openings in April, but also a rise in layoffs—suggesting further signs of softening in labor conditions.
These reports come ahead of Friday’s closely watched nonfarm payrolls release. However, analysts cautioned that the ADP figures don’t always closely align with the official employment data from the Labor Department’s Bureau of Labor Statistics.
