Financial News: U.S. Private Sector Employment Unexpectedly Dips By 33,000

U.S. Private Sector Employment Unexpectedly Dips By 33,000 Jobs In June

07/02/2025 - 12:22:00 (RTTNews)

(RTTNews) - Private sector employment in the U.S. unexpectedly decreased in the month of June, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment fell by 33,000 jobs in June after rising by a downwardly revised 29,000 jobs in May.

Economists had expected private sector employment to increase by 95,000 jobs compared to the addition of 37,000 jobs originally reported for the previous month.

"Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month," said ADP chief economist Dr. Nela Richardson.

ADP said the unexpected dip in private sector employment reflected job losses in the professional and business services and education and health services sectors, while the leisure and hospitality and manufacturing sectors saw job growth.

The report also said year-over-year pay growth for job-stayers was little changed at 4.4 percent in June compared to 4.5 percent in May.

Pay growth for job-changers was 6.8 percent in June, down slightly from 7.0 percent in May, ADP said.

On Thursday, the Labor Department is scheduled to release its more closely watched report on employment, which includes both public and private sector jobs.

Economists currently expect employment to increase by 110,000 jobs in June after climbing by 139,000 jobs in May, while the unemployment rate is expected to tick up to 4.3 percent from 4.2 percent.

"The surprising miss on the ADP report this morning calls into question what we will see in the jobs report tomorrow morning, which will be released a day earlier than normal, due to the July 4th holiday," said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management. He added, "One of the reasons the Fed has been able to be patient before cutting rates was because the job market was holding up so well, so if that were to change then the Fed may be forced to move earlier than they would like."

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