U.S. private employers shed 33,000 jobs in June - ADP

Investing.com - U.S. private payrolls dipped by 33,000 in June, worse than expectations for growth of 99,000, reflecting a hesistancy among employers to hire and reluctance among workers to leave in a time of tariff-fueled economic uncertainty.

The ADP National Employment Report was also revised to 29,000 in May, lower than an initial reading of 37,000 -- which was itself the smallest gain since March 2023.

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Job losses in professional and business services, as well as education and health care led to the drop, ADP noted in a statement on Wednesday. Leisure, hospitality and manufacturing showed an uptick.

However, layoffs remain "rare," said Nela Richardson, Chief Economist at ADP, adding that a slowdown in hiring "has yet to disrupt pay growth."

Year-on-year pay increases held steady for the month for job-stayers. Job-changers, meanwhile, saw their wages bump up by 6.8% in June, down marginally from 7%.

The ADP figures have no direct correlation with the often more consequential nonfarm payroll numbers, which are due out on Thursday. Economists expect the U.S. economy to have added 120,000 roles in June, compared to a prior reading of 139,000.

Aiming for maximum employment, as well as corralling inflationary pressures, are two of the major mandates of a Federal Reserve that has largely adopted a wait-and-see attitude to future interest rate changes. Fed Chair Jerome Powell has suggested that it is prudent to take this stance until more clarity emerges around the impact of sweeping U.S. tariffs on the wider economy, although he refused to rule out possible rate cuts in 2025 at a central bank forum this week.

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