The May ADP Employment Report, released today, brought unexpected news-the private sector added only 37,000 jobs, a stark contrast to the anticipated 110,000. These ADP numbers, which reflect the monthly changes in private business hiring, mark the lowest point since March 2023 (1).
“After a strong start to the year, hiring is losing momentum. Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers.“
says Nela Richardson, ADP Chief Economist.
Small businesses, particularly those with 20-49 employees, bore the brunt of the job losses, with a significant decrease of 7,000. Those with fewer than 19 employees also felt the pinch, down by 6,000. These figures underscore the disproportionate impact on small businesses, with mid-sized companies with 50-249 employees being the only area to show growth, adding 51,000 jobs (1).
In the Goods Sector, mining and manufacturing were down while construction was up. In the Service Sector, transportation, professional, business, education, and health services were down, while leisure and hospitality services increased by 38,000 (1).
This report could be an early signal of cracks in the economic environment, a concerning trend to watch as tariff and budget uncertainty continues to paralyze US businesses.
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