U.S. private employers added 98,000 jobs in June, according to the latest ADP National Employment Report, marking a slowdown from 122,000 jobs in May and falling short of economists’ expectations of 118,000. The weaker-than-expected figures suggest hiring momentum eased during the month, even as the broader labor market remains relatively stable.
The ADP report serves as an early indicator ahead of the U.S. government’s official employment report, which investors closely monitor for insights into the health of the economy and the direction of monetary policy.
Job Growth Was Uneven Across Industries
Hiring gains were concentrated in a handful of sectors. Education and health services led the way by adding 48,000 jobs, followed by financial activities, trade, transportation and utilities, and information services. Meanwhile, hiring remained subdued in leisure and hospitality, while natural resources and mining experienced job losses.
The report also showed that small businesses accounted for the largest share of new hiring, adding 53,000 jobs, while medium-sized companies added 29,000 and large employers contributed 25,000 positions.
Labor Market Shows Signs of Cooling
ADP Chief Economist Nela Richardson said the pace of hiring reflects both slowing labor demand and supply constraints in certain industries. While employers continue to add workers, it is taking job seekers longer to find employment, indicating that the labor market is gradually cooling rather than weakening sharply. Wage growth also remained relatively steady, with workers who stayed in their jobs seeing annual pay increases of 4.4%, while those changing jobs received average wage growth of 6.6%.
Focus Turns to Official Jobs Report
The ADP data comes just one day before the U.S. Labor Department releases its more comprehensive monthly employment report, which includes both private and public-sector jobs. Economists expect that report to show approximately 114,000 new jobs and an unemployment rate holding near 4.3%.
Investors will closely watch the official figures for clues about the strength of the U.S. economy and whether the Federal Reserve may adjust interest rates later this year. A continued slowdown in hiring could strengthen expectations that policymakers will take a more cautious approach, while persistent inflation pressures may still complicate the central bank’s next move.
