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Investing.com - U.S. private employers added fewer jobs than anticipated in May, in a sign of potential cooling in the labor market as companies grapple with uncertainty around President Donald Trump’s tariff policies.
Private payrolls came in at 37,000 last month, falling from a downwardly-revised mark of 60,000 in April, according to the ADP National Employment Report. Economists had projected that the figure would rise to 111,000.
It was lowest level for the figure since March 2023.
"After a strong start to the year, hiring is losing momentum,” said Nela Richardson, Chief Economist at ADP, in a statement on Wednesday.
However, Richardson noted that pay growth was little changed and remained "robust" for "both job-stayers and job-changers".
"The ADP report suggests the fallout from months of policy turmoil may be seeping into corporate hiring decisions (at a time when investors have grown very complacent about the economy being able to easily withstand tariffs and uncertainty)," analysts at Vital Knowledge said in a note to clients.
Separate data on Tuesday from the U.S. Labor Department found that job openings grew in April, although layoffs increased, possibly indicating some softening in the labor market.
The figures serve as precursors to the release of the all-important monthly nonfarm payrolls report on Friday. But the Vital Knowledge analysts flagged that there has not been a "particularly strong correlation" between the ADP numbers and the jobs report from the Labor Department’s Bureau of Labor Statistics.