US Private Sector Loses 33,000 Jobs in June

The US private sector shed 33,000 jobs in June, according to the latest ADP National Employment Report compiled with Stanford’s Digital Economy Lab. The data highlights a notable slowdown in hiring despite continued resilience in wage growth.

Hiring Hesitation Despite Strong Wages

ADP Chief Economist Dr. Nela Richardson noted that while layoffs remain rare, employers are increasingly hesitant to hire or replace workers, leading to a net decline in employment. However, this cautious hiring stance has not disrupted wage growth, with annual pay increases holding firm.

• Job-stayers: Average annual pay growth of 4.4%
• Job-changers: Pay growth of 6.8%

Sector Performance

Goods-Producing Sectors: Added 32,000 jobs

• Manufacturing: +15,000
• Construction: +9,000
• Natural resources/mining: +8,000

Service-Providing Sectors: Lost 66,000 jobs

• Professional & business services: -56,000
• Education & health services: -52,000
• Financial activities: -14,000
• Trade/transport/utilities: +14,000
• Leisure & hospitality: +32,000
• Other services: +5,000
• Information: +5,000

Regional Trends

• Northeast: -3,000
• Midwest: -24,000
• South: +13,000
• West: -20,000

Company Size Impact

• Small businesses (1–49 employees): -47,000
• Medium businesses (50–499 employees): -15,000
• Large businesses (500+ employees): +30,000

Wage Growth by Industry and Firm Size

Annual Pay Growth by Industry (Job-Stayers):

• Financial activities: +5.2%
• Leisure & hospitality: +4.7%
• Construction & manufacturing: +4.6%
• Trade/transportation/utilities: +4.2%
• Information: +4.1%

By Firm Size:

• Small firms (1–19 employees): +2.7%
• Medium firms: +4.7–4.8%
• Large firms (500+ employees): +4.8%

Revisions

ADP revised May’s reported job gain downward from 37,000 to 29,000, reflecting weaker hiring momentum than initially reported.

In Short

While the June report signals a cooling labor market, robust wage growth indicates ongoing tightness in specific sectors. Markets and policymakers will closely watch upcoming official employment data for confirmation of these trends and potential implications for interest rate policy in the months ahead.

Source: ADP