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U.S. private-sector hiring slowed sharply in May 2025, with only 37,000 jobs added—the weakest monthly gain since March 2023, according to ADP.
This figure fell well below economists’ expectations of 110,000 and marked a decline from April’s revised total of 60,000. The slowdown was most pronounced in goods-producing sectors, which lost 2,000 jobs, including declines in manufacturing and mining. Conversely, the service sector added 36,000 jobs, led by gains in leisure and hospitality, financial activities, and information services.
Economists attribute the hiring slowdown to ongoing trade tensions and tariffs, which have created uncertainty and prompted businesses to put their expansion plans on hold. Smaller firms, in particular, reduced hiring, with companies employing fewer than 50 workers cutting 13,000 jobs. In contrast, mid-sized businesses (50–499 employees) added 49,000 positions, suggesting that larger firms may be better positioned to weather economic headwinds.
Despite the hiring slowdown, wage growth remained steady. Annual pay increased by 4.5% for job-stayers and 7.0% for job-changers, indicating that employers are still competing for talent in certain sectors. This sustained wage growth could complicate the Federal Reserve’s decisions on interest rates, as higher wages can contribute to inflationary pressures.
In response to the weak jobs report, President Trump renewed his calls for the Federal Reserve to lower interest rates, criticizing Fed Chair Jerome Powell for not acting swiftly. Trump noted that other central banks, particularly in Europe, have already implemented multiple rate cuts. The Federal Reserve, however, has maintained its current rate range of 4.25% to 4.5%, citing the need for more data to assess the full impact of tariffs and other economic factors.
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