CNN
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High economic uncertainy has hiring grinding to a halt at US businesses.
Job growth slowed for the second month in a row at private-sector firms, which added just 37,000 jobs in May, according to new employment estimates released Wednesday by payroll company ADP.
May’s job gains, which marked a sharp stepback from the 60,000 jobs added that ADP reported for April, came in significantly below economists’ expectations for 130,000 jobs to be added.
It’s the lowest monthly total since March 2023, ADP said.
“The weak numbers we’re seeing now does not point to a labor market that’s collapsing, but there is hiring hesitancy,” Nela Richardson, chief economist at ADP, said Wednesday during a call with reporters.
Richardson pegged the loss of hiring momentum to downbeat consumer sentiment and trade policy uncertainty.
The bulk of the hiring slowdown came from the goods sector, which lost 2,000 jobs, according to ADP’s report.
President Donald Trump’s sweeping policy moves, especially a whipsaw approach to massive import tariffs, have left businesses shellshocked, uncertain of input costs and the extent to which these changing policies could rattle consumers.
“It’s like driving through fog for some of our firms here,” Richardson said. “When you’re in that situation, you can’t really stop, but you might slow down … when it comes to hiring, there’s a hesitancy because of a wide level of uncertainty.”
Despite the stark pullback in hiring, pay growth held up, presenting an encouraging sign of stability within the labor market, she said.
Pay growth for those who stayed at their employer and those who switched jobs was 4.5% and 7%, respectively.
ADP’s tabulations don’t always correlate with the official federal jobs report, but it’s sometimes looked to as a proxy for overall hiring and wage growth activity.
The official monthly jobs report from the Department of Labor will be released Friday morning. It is expected to show a slowdown from 177,000 jobs added in April to 130,000 in May.
This story is developing and will be updated.
