May’s private sector added just 37,000 jobs, significantly below the expected 115,000, according to ADP data. This marks the slowest hiring pace since March 2023, suggesting economic uncertainty is affecting employer decisions.
Large companies (500+ employees) actually lost 3,000 jobs – a notable shift from previous months’ growth. Small businesses (under 50 employees) also cut back, eliminating 13,000 positions. By industry, leisure/hospitality led with 38,000 new hires, though this sector faces challenges with travel and tourism already showing signs of slowing. Half of the industries tracked by ADP reported job losses last month. Wage growth held steady at 4.5% for existing employees and 7% for job-changers.
What’s the bottom line?
“After a strong start to the year, hiring is losing momentum,” notes ADP Chief Economist Dr. Nela Richardson. For context, the 3-month average job gain now stands at 81,000, down from the 6-month average of 115,000 and the 12-month average of 139,000 – clearly indicating a hiring slowdown.