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Businesses lost 33,000 jobs in June, according to the ADP National Employment Report released on Wednesday, July 2. That was the first monthly drop since March 2023 and behind May's downwardly revised figure of 29,000.
June's numbers came in far below Wall Street's expectations, with Dow Jones economists forecasting a gain of 100,000 jobs, CNBC reported.
"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. "Still, the slowdown in hiring has yet to disrupt pay growth."
Job losses were concentrated in professional and business services (-56,000) and education and health care (-52,000). Leisure and hospitality added 32,000 jobs, while manufacturing grew by 15,000.
The Northeast region lost 3,000 jobs in June. New England shed 10,000 jobs, while the Middle Atlantic gained 7,000.
Small businesses struggled the most. Companies with fewer than 20 employees cut 29,000 jobs, and those with up to 49 workers cut another 18,000. Large employers with 500 or more workers added 30,000 jobs.
Wages for job-stayers rose 4.4% year-over-year in June, nearly flat from May, while job-changers saw a 6.8% increase. The biggest pay gains came in leisure and hospitality (4.7%) and construction (4.6%).
The poor private jobs data comes less than a week after the Commerce Department said inflation rose slightly as consumer spending fell in May. The main inflation gauge used by the Federal Reserve was 2.3%, remaining above the Fed's 2% target before lowering interest rates.
Trump has repeatedly criticized Fed chair Jerome Powell for not dropping rates. The President's most recent comments have attacked the Princeton University graduate's intelligence.
At a central banking forum in Portugal on Tuesday, July 1, Powell said for the first time publicly that the Fed would have already cut interest rates in 2025 if it weren't for Trump's tariffs and other economic policies, CNN reported. Investors said there's an 81% chance the Fed will hold rates steady again at its next meeting on Tuesday, July 29.
The ADP is scheduled to release its next jobs report on Wednesday, July 30.
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