US Private Payrolls Add 37K Jobs in May, the Weakest Since 2023/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Private employers in the U.S. added just 37,000 jobs in May, the weakest growth since March 2023. Hiring slowdown reflects rising economic uncertainty tied to tariffs and shifting trade policies under President Trump. Despite weak gains, wage growth remained steady, and economists await Friday’s official jobs report for confirmation.
US Job Growth Slows: Quick Looks
- May Hiring Misses Forecasts: Only 37,000 private-sector jobs added vs. 110,000 expected.
- Lowest Gain Since March 2023: Marks second straight month of declining job growth.
- Goods Sector Contracts: Manufacturing and mining lost 2,000 jobs last month.
- Service Sector Holds Up: 36,000 new jobs in leisure, hospitality, and finance.
- Trade Policy to Blame: Analysts cite Trump tariffs for creating employer uncertainty.
- Wages Remain Strong: Pay rose 4.5% for job stayers, 7% for job switchers.
- Market Reacts to Data: Dow futures fell 40 points after ADP report release.
- Official Jobs Report Ahead: BLS expected to show 130,000 new jobs in May.
Deep Look: U.S. Private Payroll Growth Falls to Two-Year Low in May
U.S. private employers added just 37,000 jobs in May, marking the slowest monthly hiring pace since March 2023, according to the ADP National Employment Report released Wednesday. The surprisingly weak numbers came well below economists’ forecasts of 110,000, reflecting rising concerns about the economic impact of President Donald Trump’s trade policies.
The softening job market, particularly in the goods-producing sector, highlights how prolonged uncertainty around tariffs and import costs is influencing hiring decisions across industries. Payroll growth in April was also revised down to 60,000 jobs, continuing a two-month slowdown that may signal broader economic fragility.
“This doesn’t show a collapsing labor market,” said ADP Chief Economist Nela Richardson, “but there’s clear hiring hesitancy linked to weak consumer sentiment and policy unpredictability.”
Sharpest Decline in Goods-Producing Jobs
The decline in job creation was led by the goods-producing sector, which shed 2,000 positions, largely in manufacturing and mining. In contrast, the services sector added 36,000 jobs, driven by gains in financial services, leisure, hospitality, and information industries.
Richardson likened the hiring environment to “driving through fog” — a situation where employers are reluctant to make new commitments amid unclear cost expectations and tariff-related supply chain disruptions.
Impact of Trade Turmoil and Tariffs
President Trump’s latest tariff hikes have rattled businesses across the country. Sectors dependent on global supply chains are struggling to adapt to shifting costs, creating uncertainty that directly impacts employment planning.
“It’s like being in a holding pattern,” said Carl Weinberg, chief economist at High Frequency Economics. “When business leaders don’t know what their input costs will be, they hesitate on hiring.”
Trump, responding to the ADP data, took to Truth Social to pressure Federal Reserve Chair Jerome Powell, urging him to lower interest rates in light of the economic softening.
“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!” Trump wrote.
Markets React to Hiring Slump
The stock market showed initial concern following the report, with Dow futures dropping 40 points and S&P 500 and Nasdaq futures also slipping. Markets rebounded slightly after the opening bell, but investors remain cautious ahead of Friday’s official government employment report.
That report, from the Bureau of Labor Statistics, is expected to show 130,000 new nonfarm payroll jobs in May, a notable slowdown from April’s 177,000. The unemployment rate is projected to remain unchanged at 4.2%.
Wage Growth Remains a Bright Spot
Despite the hiring pullback, wage growth stayed resilient. ADP reported that workers who remained with their employers saw a 4.5% increase in wages, while those who changed jobs enjoyed a 7% rise.
“This stability in pay suggests that the labor market still holds underlying strength,” Richardson noted, even as employment gains decelerate.
However, the disconnect between hiring and wage growth is prompting analysts to reassess how long current wage gains can persist if job creation continues to soften.
Looking Ahead
While the ADP report doesn’t always correlate closely with the official BLS numbers, it offers an early signal of labor market trends. Many economists argue the ADP is best used to understand broad hiring patterns rather than predict specific BLS data.
Still, the report raises fresh concerns about the direction of the U.S. economy as trade-related anxieties mount and employers adopt a wait-and-see approach.
Analysts now look to Friday’s government data to confirm whether the slowdown is a temporary dip — or an early sign of deeper labor market strain.
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