Key Takeaways:
U.S. private employers added an average of 19,750 jobs per week in the four weeks ending June 27, the lowest reading in the ADP National Employment Report Pulse series since the measure began its current downtrend in early May.
"The steady deceleration in weekly hiring reflects a labor market that is cooling in a controlled, gradual manner rather than deteriorating abruptly," said James Okafor, macro analyst at Edgen. "The four-week moving average has now declined for three consecutive weeks, suggesting employers are pulling back on hiring plans as they assess demand conditions."
The 19,750 figure marks a 36 percent decline from the 30,750 reading for the period ending June 6 and a 52 percent drop from the 40,750 peak recorded in early May. The weekly estimates, produced by ADP Research in collaboration with the Stanford Digital Economy Lab, are based on a seasonally adjusted four-week moving average of payroll data from more than 25 million U.S. employees. The data carry a two-week lag to improve accuracy.
The ADP Pulse serves as a leading indicator for the Bureau of Labor Statistics' monthly employment report, which covers the reference week including the 12th of each month. The sustained slowdown in private-sector hiring adds to evidence that the labor market is responding to elevated interest rates, with the Federal Reserve holding its benchmark rate at 5.25 percent to 5.5 percent since July 2023. Nonfarm payrolls averaged roughly 200,000 per month in the first quarter, and a continued deceleration would strengthen the case for rate cuts later this year. The next NER Pulse release is scheduled for July 21, followed by the monthly ADP National Employment Report built on the July 12 reference week.
The trend in the ADP data mirrors signals from other labor market indicators. Initial jobless claims have edged higher over the past month, while the quits rate — a measure of worker confidence — has fallen back toward pre-pandemic levels. The ratio of job openings to unemployed workers, which peaked at 2-to-1 in 2022, has normalized to roughly 1.2-to-1, according to the latest JOLTS data. If the pace of hiring continues to soften at its current trajectory, weekly additions could fall below 15,000 by late July, a level last seen during the rate-hiking cycle of late 2023.
This article is for informational purposes only and does not constitute investment advice.
