Private Employers Shed 33K Jobs in June, Despite Expectations

Private U.S. employers shed a net total of 33,000 jobs in June in the first negative job numbers since March 2023, according to a closely watched employment gauge from human resources and payroll servicer ADP.

The greatest losses occurred in professional and business services and in education and health services, the report said. Other sectors showed gains, including leisure and hospitality, construction and manufacturing. The report does not track government-related job losses.

Job losses were concentrated in the Western part of the country, according to ADP, as the report noted that 24,000 jobs were lost in the Midwest and 20,000 were lost in the Rocky Mountain region. The South showed job gains of 13,000, and the Northeast showed mild losses of 3,000 overall, all concentrated in New England.

The report’s size distribution showed that smaller companies are particularly struggling, with 29,000 losses coming from companies with fewer than 20 employees. Companies with over 500 employees saw gains of 30,000 jobs, although companies with employee totals between the two were a mixed bag.

In a recent poll of economists, the Wall Street Journal found expectations for job gains in June of 100,000, indicating that economists were unprepared for the negative numbers.

ADP noted that layoffs are still infrequent, and that the losses are being felt mostly in new and replacement positions.

“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” Nela Richardson, chief economist for ADP, said in a statement. “Still, the slowdown in hiring has yet to disrupt pay growth.”

According to the company, the ADP National Employment Report is “based on the aggregated and anonymized payroll data of more than 25 million U.S. employees.”

Larry Getlen can be reached at lgetlen@commercialobserver.com.