
The US private sector unexpectedly lost jobs in June, according to data from payroll firm ADP on Wednesday, a potential sign of labour market weakness amid uncertainty from president Donald Trump’s tariffs.
It was the first such decline in recent years, in data that will be scrutinized ahead of government employment numbers due to be released a day later.
As companies grapple with uncertainty from Trump’s shifting tariff policies — alongside supply chain disruptions and added cost pressures — analysts are watching for signs that the world’s biggest economy may be less solid than expected.
Private sector employment declined by 33,000 last month, ADP said, while job growth in May was revised lower to 29,000.
‘Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,’ ADP chief economist Nela Richardson said in a statement.
But she maintained that the hiring slowdown ‘has yet to disrupt pay growth.’
The losses came about in areas like professional and business services, alongside education and health services.
But sectors like leisure and hospitality, alongside manufacturing, showed gains, ADP said.
Meanwhile, pay growth held steady, according to the report.
For those who remained in their jobs, annual pay gains were little-changed at 4.4 per cent. Increases for those who changed jobs was 6.8 per cent in June, slowing slightly.
Analysts have cautioned that the ADP data sometimes differ significantly from official numbers.
But the decline still marked a concerning development, they said.
Since returning to the presidency, Trump has imposed a sweeping 10 per cent tariff on almost all US trading partners and higher levels on imports of steel, aluminium and autos.
‘The ADP headline figure is well below market expectations, and the optics of a decline is startling,’ said Carl Weinberg, chief economist at High Frequency Economics.
‘Whether this report is accurate or not, traders and investors will read today’s number as a dark result for trading today,’ he added in a note.
Adam Sarhan from 50 Park Investments added that it is the first time in recent months that the US jobs market has disappointed and contracted.
‘And that is worrisome because up until now unemployment has been low and jobs have been strong and growing,’ Sarhan said.
Weinberg, however, also cautioned that companies are likely to respond to the chances of a tariff-induced hike in costs by ‘becoming more aggressive about trimming their workforces.’
‘This may be the tip of an iceberg, but it also could be a false start,’ he said.