The US private sector lost 33,000 jobs in June, far short of the expected 100,000 increase, according to ADP’s report. This contraction is a potential sign that the economy may not be as strong as investors initially thought.
ADP, a payrolls processing firm, reported the first decrease in job losses since March 2023. Economists polled by Dow Jones had forecast an increase of 100,000 jobs for the month. The May job growth figure was revised downward to 29,000 jobs added from 37,000.
Chief economist Nela Richardson attributed the job losses to a lack of hiring and reluctance to replace departing workers. However, it’s worth noting that ADP’s report has a spotty track record in predicting subsequent government jobs reports, which investors tend to prioritize more heavily.
The government’s nonfarm payrolls report is expected to be released on Thursday with economists forecasting a 110,000 increase for June. The unemployment rate is expected to tick higher to 4.3% from 4.2%.
Service roles were hit hardest in the private sector, with professional and business services experiencing a decline of 56,000 and health/education seeing a net loss of 52,000. Financial activity roles also contributed to the contraction.
However, goods-producing roles expanded by 32,000 in June, with payroll growth in industries such as manufacturing and mining. The Midwest and Western US saw the strongest contractions, while the Northeast shed 3,000 roles.
Small businesses were disproportionately affected, with those with fewer than 20 employees losing more jobs on net than larger firms.
Source: https://www.cnbc.com/2025/07/02/adp-jobs-report-june-2025.html