In May 2025, the U.S. private sector experienced a significant slowdown in job creation, adding only 37,000 positions—the lowest monthly gain since March 2023. This figure, reported by payroll processing firm ADP, fell sharply below economists’ expectations of 110,000 jobs and marked a decline from April’s revised total of 60,000.
Sector-Specific Employment Trends
The downturn in hiring was uneven across industries:
- Goods-Producing Sector: Experienced a net loss of 2,000 jobs.
- Natural Resources and Mining: Decreased by 5,000 positions.
- Manufacturing: Down by 3,000 jobs.
- Construction: Added 6,000 jobs, partially offsetting losses.
- Service-Providing Sector: Saw a modest increase of 36,000 jobs.
- Leisure and Hospitality: Led gains with 38,000 new positions.
- Financial Activities: Added 20,000 jobs.
- Information: Grew by 8,000 positions.
- Professional and Business Services: Declined by 17,000 jobs.
- Education and Health Services: Decreased by 13,000 positions.
- Trade, Transportation, and Utilities: Down by 4,000 jobs. Investopedia.com
Employment Changes by Business Size
Job growth varied significantly by company size:
- Small Businesses (1–49 employees): Experienced a net loss of 13,000 jobs.
- Medium-Sized Businesses (50–499 employees): Added 49,000 jobs, with those employing 50–249 workers contributing 51,000 positions, while firms with 250–499 employees lost 2,000 jobs.
- Large Businesses (500+ employees): Reported a decline of 3,000 jobs.
Wage Growth Remains Steady
Despite the slowdown in hiring, wage growth remained robust:
- Job-Stayers: Experienced a 4.5% year-over-year increase in annual pay.
- Job-Changers: Saw a 7% increase in annual pay compared to the previous year.
These figures suggest that while employers are cautious about expanding their workforce, they continue to offer competitive wages to retain and attract talent.
Regional Employment Variations
Employment changes varied across different U.S. regions:
- Northeast: Decreased by 19,000 jobs.
- Midwest: Increased by 20,000 jobs.
- South: Declined by 5,000 jobs.
- West: Added 37,000 jobs, with the Mountain region contributing 35,000 of these positions . ADP
Political and Economic Implications
The disappointing job numbers prompted renewed political pressure on the Federal Reserve. President Donald Trump criticized Fed Chair Jerome Powell, urging immediate interest rate cuts. On his Truth Social platform, Trump stated, “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”
Economists are closely watching the Federal Reserve’s response, as the central bank balances the need to control inflation with the goal of supporting employment. The next Federal Open Market Committee meeting is scheduled in two weeks, where interest rate decisions will be a focal point.
Looking Ahead
The labor market’s trajectory remains uncertain. While wage growth is strong, the significant slowdown in hiring raises concerns about the broader economic outlook. Upcoming data, including the Bureau of Labor Statistics’ nonfarm payrolls report, will provide further insights into the health of the job market and inform future monetary policy decisions. MarketWatch
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