High economic uncertainy has hiring grinding to a halt at US businesses. Job growth slowed for the second month in a row at private-sector firms, which added just 37,000 jobs in May, according to new employment estimates released Wednesday by payroll company ADP. May’s job gains, which marked a sharp stepback from the 60,000 jobs added that ADP reported for April, came in significantly below economists’ expectations for 130,000 jobs to be added. It’s the lowest monthly total since March 2023, ADP said. “The weak numbers we’re seeing now does not point to a labor market that’s collapsing, but there is hiring hesitancy,” Nela Richardson, chief economist at ADP, said Wednesday during a call with reporters. Richardson pegged the loss of hiring momentum to downbeat consumer sentiment and trade policy uncertainty. The bulk of the hiring slowdown came from the goods sector, which lost 2,000 jobs, according to ADP’s report. US stock futures, which had been rising, dropped after the data release. Dow futures fell 40 points. S&P 500 futures slid 0.1%, and futures tied to the Nasdaq 100 slid 0.2%. All three major indexes moved into the green shortly after the opening bell. President Donald Trump’s sweeping policy moves, especially a whipsaw approach to massive import tariffs, have left businesses shellshocked, uncertain of input costs and the extent to which these changing policies could rattle consumers. “It’s like driving through fog for some of our firms here,” Richardson said. “When you’re in that situation, you can’t really stop, but you might slow down … when it comes to hiring, there’s a hesitancy because of a wide level of uncertainty.” Despite the stark pullback in hiring, pay growth held up, presenting an encouraging sign of stability within the labor market, she said. Pay growth for those who stayed at their employer and those who switched jobs was 4.5% and 7%, respectively. Following the ADP release, Trump took to social media Wednesday morning to ramp up pressure on Federal Reserve Chair Jerome Powell to cut interest rates. “ADP NUMBER OUT!!! “Too Late” Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!” Trump wrote in a Truth Social post. Central bankers and Powell, whom Trump appointed to helm the Fed starting in 2018, have taken a cautious approach to monetary policy in recent months to get a better gauge on how the economic data responds to Trump’s policies. The Fed’s May policy statement noted that the “risks of higher unemployment and higher inflation have risen.” ADP’s tabulations don’t always correlate with the official federal jobs report, but it’s sometimes looked to as a proxy for overall hiring and wage growth activity. The official monthly jobs report from the Department of Labor will be released Friday morning. It is expected to show a slowdown from 177,000 jobs added in April to 130,000 in May. This story is developing and will be updated.
Private-sector firms added just 37,000 jobs in May, the lowest total in more than two years
TruthLens AI Suggested Headline:
"Private Sector Job Growth Slows to 37,000 in May Amid Economic Uncertainty"
CNN
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TruthLens AI Summary
In May, private-sector firms in the United States added only 37,000 jobs, marking the slowest job growth in over two years, according to the latest employment estimates from payroll company ADP. This figure represents a significant drop from the 60,000 jobs added in April and falls well short of economists' expectations of 130,000 jobs for the month. The decline in hiring momentum has been attributed to a combination of weak consumer sentiment and uncertainties surrounding trade policy, as noted by ADP's chief economist, Nela Richardson. The goods sector was particularly affected, experiencing a loss of 2,000 jobs. Following the release of these disappointing figures, U.S. stock futures fell, reflecting the market's immediate reaction to the slowdown in hiring. Despite the downturn in job growth, pay increases remained stable, with pay growth for employees who stayed at their jobs averaging 4.5%, while those who switched jobs experienced a more substantial increase of 7%. This suggests that while hiring may be hesitant, the labor market retains some stability in terms of wages.
The current economic climate is characterized by heightened uncertainty, largely due to President Donald Trump's aggressive trade policies, which have left businesses uncertain about input costs and consumer behavior. Richardson likened the situation to driving through fog, where firms are compelled to proceed cautiously. In response to the weak job numbers, President Trump has publicly called for Federal Reserve Chair Jerome Powell to lower interest rates, suggesting that the Fed's cautious approach to monetary policy may need to be reevaluated in light of the latest employment data. The Federal Reserve's recent statements have highlighted the increased risks of higher unemployment and inflation, indicating the complexity of the current economic landscape. The official jobs report from the Department of Labor is expected to further confirm this trend, projecting a slowdown in job creation from April's 177,000 to around 130,000 for May, suggesting that the labor market may be facing more significant challenges ahead.
TruthLens AI Analysis
The recent news about private-sector employment in the U.S. paints a concerning picture of the labor market, highlighting economic uncertainty and hesitancy among businesses to hire. The article indicates a significant decline in job creation, which has implications for various sectors and the overall economy.
Economic Uncertainty and Hiring Hesitancy
The article reveals that private-sector firms added only 37,000 jobs in May, a stark decrease from previous months. This suggests that businesses are facing high levels of economic uncertainty, influenced by factors such as consumer sentiment and unpredictable trade policies. The mention of businesses feeling "shellshocked" due to fluctuating import tariffs reflects a broader concern about the stability of the economic environment.
Impact on Financial Markets
Following the release of these employment figures, stock futures experienced a drop, indicating that investors reacted negatively to the news. The decline in Dow, S&P 500, and Nasdaq futures suggests that market participants are wary of the implications of slowed job growth on economic performance. This reaction underlines the interconnectedness of labor market conditions and investor sentiment.
Potential Manipulation and Public Perception
The language used in the article could evoke feelings of concern among the public about the state of the economy. Phrases like "hiring hesitancy" and "driving through fog" create a vivid image of confusion and uncertainty. This could be seen as a way to manipulate public perception by framing the narrative around a lack of confidence in the economy, potentially influencing consumer behavior and spending habits.
Comparative Analysis with Other News
In comparison to other economic reports, this article emphasizes the challenges faced by the labor market. Similar reports in recent months have highlighted resilience in certain sectors, but this news acts as a counterpoint, suggesting a more cautious outlook. The juxtaposition of these narratives may serve to highlight the fragility of the economic recovery.
Sociopolitical Implications
The article also suggests that the political landscape, particularly under Trump's administration, plays a role in economic uncertainty. The reference to Trump's trade policies indicates a broader discussion about how governmental decisions impact business operations and employment. This connection could resonate with specific communities concerned about economic policies and their effects on job creation.
Investor Sentiment and Stock Market Implications
Investors may view this news as a signal to reassess risk in their portfolios, particularly in sectors sensitive to consumer spending and economic growth. Companies that rely heavily on consumer confidence or that are exposed to trade policies may face volatility as a result of this report.
Global Economic Context
While the article primarily focuses on the U.S. labor market, the implications of job growth and economic uncertainty can have ripple effects globally. Investors and policymakers around the world may watch these developments closely, as they can influence global economic trends and trade relations.
The article relies on factual employment data from ADP but presents it through a lens that emphasizes uncertainty and caution. This framing may lead to an impression of instability in the labor market, potentially influencing public sentiment and economic behavior. Overall, the reliability of the news is grounded in its use of statistical data, although the interpretation of that data could be seen as a manipulation of public perception concerning economic health.