ADP Reports Shocking Job Loss: Private Sector Sees 33,000 Layoffs in June, Falling Well Below 100,000 Growth Expectations

In April 2025, job seekers gathered at the Mega JobNewsUSA South Florida Job Fair in Sunrise, Florida. City booths and police departments were ready to connect with potential employees.

In June, however, a report from payroll processor ADP revealed a surprise twist: private sector hiring fell by 33,000 jobs. This was the first drop since March 2023 and caught many off guard, especially since economists had expected an increase of 100,000 jobs. Just a month earlier, the job growth number was adjusted downward to 29,000.

Nela Richardson, ADP’s chief economist, noted that while layoffs are still quite rare, companies have been hesitant to hire. A mix of uncertainty and the reluctance to replace departing workers contributed to this decline. Historically, the ADP report has had mixed results in predicting the government’s job numbers, which usually carry more weight with investors.

Looking ahead, the government’s nonfarm payroll report was anticipated to show a healthier growth of about 110,000 jobs. However, the unemployment rate was expected to rise slightly to 4.3%. Economists were also monitoring weekly jobless claims, with expectations set at 240,000.

The report highlighted which sectors were most affected. Job losses were concentrated in service roles, particularly in professional services and healthcare. Professional services reported a decrease of 56,000 jobs, while the healthcare and education sector lost 52,000 positions. Interestingly, manufacturing and mining saw growth, adding 32,000 jobs.

Geographically, the Midwest and Western U.S. experienced the biggest losses, shedding 24,000 and 20,000 jobs respectively. The Northeast lost 3,000 jobs, but the Southern region was unique, managing to gain 13,000 positions.

Smaller firms continued to struggle, losing a net of 29,000 jobs, while larger companies with over 500 employees added 30,000 jobs. This divide raises questions about the stability of small businesses, especially as the economy continues to evolve.

Another important note is that annual income growth saw a small dip. For those staying in their jobs, pay increases fell to 4.4%. For job changers, growth decreased to 6.8%.

The market reacted positively, with the S&P 500 climbing over 4% for the year, bouncing back from earlier concerns about tariffs that nearly sent it into a bear market.

In summary, while the job market shows pockets of strength, challenges persist, especially in service sectors and smaller businesses. As the economy adapts, staying informed on these trends will be essential for job seekers and policymakers alike.



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