Why Did ADP Plunge 6.98% on Disappointing Job Growth?

On June 5, 2025, Automatic Data Processing (ADP) experienced a significant drop of 6.98% in pre-market trading, reflecting investor concerns and market sentiment.

ADP reported that private sector employment increased by 37,000 jobs in May, falling short of the projected 110,000 new jobs. This marks the second consecutive month of weaker-than-expected job growth, raising questions about the company's performance and the broader economic outlook.

Despite the disappointing job numbers, ADP noted that annual wage growth remained stable at 4.5%. This stability in wages suggests that while job creation may be slowing, the company is maintaining its commitment to employee compensation, which could mitigate some of the negative impact on its stock price.