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 concerns about the overall health of the labor market.

Despite the disappointing job numbers, wage growth remained stable, with annual salaries increasing by 4.5% year-over-year. This stability in wages may provide some reassurance to investors, as it indicates that companies are still investing in their workforce despite the slower job growth.

The market's reaction to ADP's report highlights the sensitivity of investors to economic indicators, particularly in the context of recent trade tensions and mixed earnings reports. The combination of these factors has contributed to the volatility in ADP's stock price, as investors reassess their positions in light of the latest data.