U.S. Private Payroll Growth Slows Sharply in May – ADP

Hiring in the U.S. private sector slowed significantly in May, with only 37,000 new jobs added—well below the consensus estimate of 111,000 and down from April’s downwardly revised figure of 60,000 (previously 62,000).

This marks the weakest monthly gain in over two years. However, analysts caution against interpreting the drop as a sign of a sharp labor market deterioration. Instead, they view it as part of a gradual cooling trend, driven by mounting uncertainty over slowing economic growth and the potential negative effects of new tariffs.

The services sector made the largest contribution to May’s employment gains, showing signs of resilience and offering some balance to the otherwise subdued report, especially amid growing concerns sparked by recent economic data.

The ADP report is the second of three major labor market releases typically issued in the first week of each month. The first, the JOLTS report, showed stronger-than-expected results. Markets now await Friday’s U.S. Nonfarm Payrolls (NFP) report for a more complete picture of labor market conditions in May—a key metric for assessing the health of the broader economy.