ADP private payrolls slow to 21,000 per week, extending hiring slump

U.S. private employers added an average of 21,000 jobs per week in the four weeks ending June 20, extending a two-month slowdown that has seen the pace of hiring more than halve since early April, according to the ADP National Employment Report Pulse released Tuesday.

"The NER Pulse is an estimate of the week-over-week change in employment based on a four-week moving average," ADP Research said in the release, noting the data is seasonally adjusted with a two-week lag to allow for more complete estimates of real-time employment trends.

The 21,000 figure is the lowest in the 12-week series, down from 24,250 the prior week and 30,750 two weeks earlier. The four-week moving average has declined steadily from a peak of 40,750 in early May, with readings above 30,000 in each of the first five weeks of the series before falling below that threshold in late May. The preliminary estimates could be revised as new data is added, ADP said.

The ADP data, produced with the Stanford Digital Economy Lab, serves as a precursor to the Bureau of Labor Statistics' nonfarm payrolls report. A sustained deceleration in private hiring would strengthen the case for the Federal Reserve to begin cutting interest rates from their current 23-year high of 5.25% to 5.50%, a level that has been in place since July 2023. Fed Chair Jerome Powell has said the central bank needs greater confidence that inflation is moving sustainably toward 2% before easing policy.

The deceleration from the 40,750 peak in early May to the current 21,000 represents a decline of nearly 50 percent over roughly seven weeks. The trend, if sustained, would mark a significant cooling in the labor market compared with the first quarter, when monthly ADP reports consistently showed stronger hiring. The monthly ADP National Employment Report for June, built on a reference week that includes the 12th day of the month, will provide a more complete picture.

The next NER Pulse release is scheduled for July 14.

This article is for informational purposes only and does not constitute investment advice.