Trend analysis based on the updated indicator.
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According to the latest data, US ADP private nonfarm payroll additions slipped to 98,000 in June of Q2 2026, a significant decline from May's 122,000, and well below the market consensus of 118,000. This is another cooling signal released by the job market, showing that the overall corporate hiring pace is pulling back, and the momentum of employment growth has slowed significantly.
Further breaking down the key details, employment growth exhibited severe industrial imbalance. The education and healthcare services sector added 48,000 jobs, contributing almost half of the total increase; finance, and trade and transportation increased by 14,000 and 15,000 respectively. However, the leisure and hospitality services sector remained weak for the sixth consecutive month, adding only 2,000 jobs, while the natural resources and mining sector lost 5,000 employees against the trend. Meanwhile, small businesses with fewer than 50 employees became the current main recruitment force with an increase of 53,000 jobs.
Regarding the data changes, Nela Richardson, chief economist at ADP, pointed out that the current hiring pace reflects the tug-of-war between supply and demand in the labor market. The time it takes for job seekers to find a job is lengthening, yet some industries are experiencing restricted labor supply. This complex environment has led to a slowdown in overall job creation, forming a pattern of "low hiring, but also low firing."
Looking ahead to the short term (1-2 months), the market will closely monitor the upcoming official nonfarm payrolls report to verify whether the labor market is fully cooling down. Worth noting as a warning is that despite the hiring slowdown, the year-over-year wage growth rate for job changers accelerated against the trend to 6.6%; the stickiness of wage inflation may limit the Federal Reserve's room for rate cuts in the near term. In the medium term (3-6 months), if the job market cools steadily, there will be more room for policy pivot in the second half of the year; but if wage inflation continues to run hot unabated, precautions must be taken against the tail risk of the economy falling into stagflation.
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