US private payrolls slow unexpectedly in June
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The news: ADP data shows that employment at US companies dropped in June, as a drop in services payrolls underscores concerns about a labour market slowdown.
The numbers: Private payrolls tumbled by 33,000 jobs in June, following a downwardly revised 29,000 increase in May according to research released by ADP on Wednesday. Neither Reuters nor Bloomberg economists expected a decline.
Service providers payrolls dropped by 66,000 last month, due to declines across professional and business services as well as health care and education.
The report shows that average payrolls growth over the past three months slowed to 18,700 in May, its weakest level since early 2022. The US’ recurring jobless rate continues to climb as those without jobs are staying unemployed for longer.
Wage growth has also cooled, with pay growth for job-stayers little changed in June at 4.4%, while those who found new jobs saw a 6.8% increase.
The context: “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, chief economist at ADP, said in a statement.
The US Department of Labor will release its more comprehensive employment report for June on Thursday.
