The June ADP National Employment Report indicated a 4.4% year-over-year annual pay gain despite private-sector employment shedding 33,000 jobs after observers expected modest gains.
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Dr. Nela Richardson, ADP chief economist. “Still, the slowdown in hiring has yet to disrupt pay growth.”
With tariffs still in flux and the effects of President Donald Trump’s “Big Beautiful Bill” on the economy difficult to gauge, many businesses might be taking their time filling even necessary positions, observers noted. However, the increase in annual pay at least suggests businesses are healthy enough to offer higher salaries when they do hire and to keep workers in their roles.
In June, the small business segment generally saw job losses while smaller medium-sized operators, those with 50 to 249 employees in ADP’s definition, saw job gains, according to ADP. Bigger medium sized businesses with 250 to 499 employees saw job losses, while large businesses with 500 or more employees saw job gains, ADP reported.
Private sector employment has been on the rise since August 2020 and surpassed pre-pandemic numbers in December of 2021, according to ADP.
As for business types, what ADP designates as goods producers, including the natural resources/mining, construction and manufacturing industries, added jobs while service industries lost them. The biggest declines were in professional/business services and education/health services, with financial activities businesses seeing a smaller decline. Other services industries showed job growth.
By region, the Midwest had the largest job losses followed by the West and the Northeast. The South added jobs, according to ADP.
