U.S. adds just 37,000 private sector jobs in May 2025 — ADP report stuns as Trump calls on Fed to slash rates

Private sector job growth slows sharply in May 2025, just 37,000 jobs added as hiring momentum fades- The U.S. private sector added only 37,000 jobs in May 2025, marking the lowest monthly gain in more than two years, according to fresh data released Wednesday by payroll processing firm ADP. The figure is far below the 110,000 job increase forecasted by economists and a significant drop from April’s revised total of 60,000 new positions.

Dr. Nela Richardson, Chief Economist at ADP, acknowledged the slowdown, saying, “After a strong start to the year, hiring is losing momentum." Despite the sharp deceleration in job creation, wage growth stayed firm across sectors for both workers who stayed in their jobs and those who switched roles.

Meanwhile, President Donald Trump, responding swiftly to the ADP numbers, renewed his call for the Federal Reserve to cut interest rates, posting on Truth Social, “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”

Why did private sector job growth fall so sharply in May?

The slowdown in private sector job creation suggests that many businesses are pulling back on hiring as economic uncertainty rises. The 37,000 jobs added in May represent the smallest monthly gain since January 2023, when similar caution was seen amid market volatility.

Economists had widely expected a more moderate gain of 110,000 jobs, especially following a weak April report that was later revised slightly upward to 60,000. However, this consistent decline in job additions is raising red flags about a broader cooling in the labor market.

What sectors are losing steam in hiring?

ADP did not break down the job gains by sector in its brief update Wednesday, but the pattern of recent months shows weakness in manufacturing, transportation, and retail hiring. Many companies in these sectors have scaled back due to cost pressures and softening demand.

While sectors like healthcare and hospitality have continued to add jobs, the pace has not been enough to offset losses or stagnation elsewhere. Small and midsize firms, in particular, are showing signs of cautious hiring or freezing new roles altogether.

Is wage growth still holding steady despite the hiring slowdown?

Yes, surprisingly, pay growth remained strong in May. According to ADP, wage increases were steady for both job-stayers and job-changers. This suggests that employers are still willing to pay more to retain talent or attract new hires in key roles — even as they slow overall hiring.

This trend could complicate the Federal Reserve’s approach to interest rate cuts, as strong wage growth tends to keep inflation sticky, a major concern for policymakers.

How is President Trump responding to the jobs data?

President Trump took to Truth Social shortly after the ADP report was released, using the soft jobs number to intensify pressure on Fed Chair Jerome Powell. Trump posted: “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!”

Trump has repeatedly urged the Federal Reserve to cut interest rates more aggressively, pointing to global trends where central banks in Europe have already slashed rates multiple times. The weak ADP jobs number gave him new ammunition to make that case as he looks to boost economic momentum heading into the summer.

What does this mean for the Federal Reserve’s next move?

The latest ADP report adds weight to growing arguments that the Federal Reserve may need to ease monetary policy sooner rather than later. While Fed officials have been cautious about cutting rates too quickly, a slowing labor market — coupled with signs of cooling inflation — could tip the balance.

Market watchers will now turn to Friday’s official nonfarm payrolls report from the Labor Department, which is expected to provide a more complete picture of the U.S. employment landscape. If it confirms the ADP slowdown, rate cut expectations may intensify ahead of the next Fed meeting.

Is the U.S. labor market cooling faster than expected?

With only 37,000 private sector jobs added in May, the data points to a notable slowdown in job creation. While wage growth remains steady, the weak hiring number underscores growing uncertainty in the U.S. economy. Combined with increasing political pressure from President Trump and a watchful eye on the Fed, the coming weeks could be pivotal for economic policy decisions.

FAQs:

Q: Why did private sector job growth slow in May 2025?
Because U.S. companies are hiring cautiously amid rising economic uncertainty.

Q: What did President Trump say about the ADP jobs report?
Trump called on the Fed to lower rates, citing weak job growth data.