Private sector hiring shrunk dramatically last month in a worrying sign for the the US economy.
Private payrolls shed 33,000 jobs in June, but analysts had expected them to add 100,000, the latest ADP figures revealed.
The worrying data – the first decrease since 2023 – suggests the US economy could be a lot less resilient than investors have been hoping.
The S&P 500 and Nasdaq indexes turned negative in pre-market trading following the release of the report on Wednesday morning.
‘Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,’ Nela Richardson, ADP’s chief economist said in a statement.
It comes after a recent stable jobs report and better-than-expected inflation figures sent encouraging signs that the US economy was bearing up amid President Trump’s whipsawing tariff policies.
The government’s major nonfarm payrolls report for June will be published on Thursday.
Economists have predicted a 110,000 increase in jobs for June and a slight ticking up of unemployment from 4.2 percent to 4.3 percent.
Private payrolls shed 33,000 jobs in June despite analysts expectations of positive hiring
However, some analysts may decide to scale back their expectations following the release of ADP’s figures.
The latest report will likely confirm the Federal Reserve’s position on holding interest rates steady.
Fed chair Jerome Powell has advocated a wait-and-see approach, concerned that the full effect of Trump’s economic policies have yet to be felt by the wider economy.
Companies have looked to tighten their payrolls in the face of high tariff bills and economic uncertainty caused by chaotic policy.
It comes after the economy contracted in the first quarter of the year and economists are increasingly concerned about the risk of a recession.
Microsoft announced on Wednesday that it would be slashing 9,000 jobs – around 4 percent of its global workforce.
‘We continue to implement organizational changes necessary to best position the company and teams for success in a dynamic marketplace,’ Microsoft said in a statement.
The news comes days after Amazon’s CEO announced brutal workforce cuts as continues to implement AI in its operations.
Private sector hiring shrunk dramatically last month in a worrying sign for the the US economy
Amazon boss Andy Jassy said he plans to reduce the company’s corporate workforce over the next few years as the tech will make certain roles redundant.
Jassy told employees in a note seen by the Wall Street Journal that AI was a once-in-a-lifetime technological advancement and it has already transformed how Amazon operates.
