(NewsNation) — Employment at U.S. companies just fell for the first time since 2023, according to new data from payroll provider ADP.
The private sector shed 33,000 jobs in June, Wednesday’s report showed — well below the 100,000 job gain economists had expected, per a Wall Street Journal poll.
June’s surprising drop marks the first monthly decline in the ADP data since March 2023.
Hiring slows in May but no sign of collapse yet
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” Nela Richardson, chief economist at ADP, said in a statement.
Job losses in professional and business services (-56,000) and education and health services (-52,000) led the decline. Meanwhile, leisure and hospitality (+32,000) and manufacturing (+15,000) showed gains.
ADP also revised its May job growth figure downward, from 37,000 jobs added to just 29,000.
The new data comes a day ahead of the Labor Department’s more closely watched monthly nonfarm payrolls release. While the two reports can point to similar trends, they rely on different data, so the numbers often vary widely.
Recent college grads face toughest job market in years
But even if ADP’s June figures are only directionally right, they suggest a cooler labor market than recent headlines imply.
For months, Labor Department data has shown that hiring remains steady, with employers adding an average of 124,000 jobs per month through May. That’s down from last year’s average of 168,000, but not enough to signal a total collapse in the job market.
Still, cracks have been emerging. Initial job gains have been repeatedly revised downward in subsequent reports, and recent college graduates are facing their toughest job market in years.
Thursday’s government report could be especially informative as economists continue to assess the impact of President Donald Trump’s shifting tariff policies. The effects on the labor market weren’t expected to show up in the data until several months after “Liberation Day” in early April.
The Labor Department is expected to report Thursday that the U.S. economy generated 117,000 jobs last month, according to a survey of forecasters by FactSet. Meanwhile, the unemployment rate is expected to tick up to 4.3% from 4.2% in May, still relatively low.
If the stock market is any indicator, investors remain confident in the economy. After a tumultuous three months of tariff-induced uncertainty, major stock indexes are back at record highs.
