Private employers in the United States unexpectedly cut 33,000 jobs in June, another sign that the US labor market is slowing.
On Wednesday, data from ADP showed that the number of jobs in the private sector fell by 33,000 in June, well below the 29,000 job gain in May and economists’ expectations of 98,000.
This was the first time the private sector has recorded job losses since March 2023. The preliminary reading for May, which was an increase of 37,000 jobs, was also the lowest monthly total since March 2023.
“While layoffs remain rare, cautious hiring and a reluctance to replace departing workers contributed to the decline in employment last month,” said ADP Chief Economist Nela Richardson. “However, the hiring slowdown has not yet weighed on wage growth.”
Wages remained a more positive indicator of the labor market, with ADP Pay Insights data showing that wages for workers who changed jobs rose 6.8% in June, while wages for those who stayed in their jobs rose 4.4%. Both were slightly lower than the previous month.
The data came as investors continued to watch closely for signs of a slowdown in the labor market, as the debate over when the Federal Reserve will cut interest rates heats up. As of Wednesday, markets were expecting at least two rate cuts in 2025, up from just one a month ago, according to Bloomberg data.
In recent weeks, labor market data has been mixed.
Hiring has remained subdued, and the number of Americans filing for unemployment benefits has continued to rise. But on Tuesday, new data from the Bureau of Labor Statistics showed 7.76 million job openings at the end of May, up from 7.39 million the previous month and the highest level since November 2024.
The report also showed that hiring and job loss rates were near their lowest levels in a decade, reflecting a labor market in “stasis,” where workers are not being laid off en masse but are also not moving jobs voluntarily.
Wednesday’s data also comes ahead of the government’s official labor market report due out Thursday morning.
The consensus forecast is for the June jobs report to show hiring continuing to slow, with nonfarm payrolls expected to fall to 110,000 and the unemployment rate to rise to 4.3%.
