ADP Reports Biggest Drop In Service-Provider Jobs Since COVID Lockdown

Having trended weaker for the last two months, analysts expected a modest bounce back in the ADP Employment Report for June (following the mixed picture from ISM/PMI for employment and another mixed bag from Challenger, Grey Job Cuts data this morning).

BUT… The headline print saw a 33k DROP in jobs in June (and a downward revision to +29k in May) – the biggest/first drop since March 2023

Source: Bloomberg

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” said Nela Richardson Chief Economist, ADP.

After losing 2k jobs in May, Goods-Producing firms managed 32k job additions in June but Services providers saw jobs drop 66k – the biggest drop since COVID lockdowns…

Source: Bloomberg

The job losses were dominated by smaller businesses…

“Still, the slowdown in hiring has yet to disrupt pay growth.”

• Year-over-year pay growth for job-stayers was little changed for June at 4.4 percent compared to 4.5 percent in May.

• Pay growth for job-changers was 6.8 percent in June, down slightly from 7.0 percent last month.

So, will Powell consider rate-cuts now?