Hiring Slows Sharply in May as Private Employers Add Just 37,000 Jobs, ADP Reports
U.S. job growth nearly stalled in May amid mounting economic uncertainty, with private-sector firms adding only 37,000 jobs — the lowest total since March 2023, according to the latest ADP jobs report released Wednesday. The sharp slowdown follows a revised April gain of 60,000 jobs and falls far short of economists’ expectations for 130,000 new positions.
The ADP employment data, often used as an early indicator ahead of the official jobs report, highlights growing caution among businesses. “This doesn’t signal a collapsing labor market, but hiring is slowing,” said Nela Richardson, ADP’s chief economist, during a media call. She attributed the drop in momentum to waning consumer sentiment and uncertainty around trade policy.
The ADP report noted that job losses in the goods-producing sector were a key drag, with a net loss of 2,000 positions. In contrast, pay growth remained relatively strong. Wages rose 4.5% for workers who stayed in their roles and 7% for job switchers, offering some stability in an otherwise cooling labor landscape.
Markets reacted swiftly to the release. U.S. stock futures, which had been rising, dipped following the news. Dow futures fell 40 points, while S&P 500 and Nasdaq 100 futures declined 0.1% and 0.2%, respectively, before rebounding after the opening bell.
The disappointing figures come as businesses navigate volatile trade policy under President Donald Trump, particularly regarding shifting import tariffs. “It’s like driving through fog,” Richardson said. “You can’t stop entirely, but you do slow down — and that’s what we’re seeing in hiring behavior.”
The weak numbers prompted Trump to urge the Federal Reserve to cut rates. “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE,” he posted on Truth Social, criticizing Fed Chair Jerome Powell’s measured stance on interest rates.
Although ADP’s estimates don’t always align with the federal numbers, they’re closely watched on the economic calendar as a proxy for broader trends. The official Labor Department jobs report is due Friday and is projected to show a deceleration from April’s 177,000 new jobs to around 130,000 in May.
