US Hiring Slows to Two-Year Low as Economic Uncertainty Weighs on Job Market

The pace of hiring by American companies has slowed to its lowest level in two years, with sectors such as business services, education, and healthcare reducing positions, highlighting weakened employment demand.

Data released by ADP Research reveals that the U.S. private sector added only 37,000 jobs last month, falling short of all economists' expectations in a Bloomberg survey. This marks the second consecutive month that the figures have come in below predictions.

"Following a strong start this year, the momentum for hiring is waning," stated ADP Chief Economist Nela Richardson in a statement on Wednesday.

The data suggests that the uncertainty surrounding the evolving economic policies of U.S. President Donald Trump over the past two months has negatively impacted corporate hiring decisions. The slowdown means it takes longer for unemployed individuals to secure new jobs. Economists anticipate more signs of cooling in the labor market in the coming months.

During May, industries such as trade, transportation, and manufacturing experienced job losses, while the leisure, hospitality, and financial activities sectors saw an increase in hiring. The Northeast region saw the most job cuts, and both small and large enterprises reduced their employment numbers.

Following the release of ADP's data, Trump again took to social media to emphasize his call for Federal Reserve Chairman Jerome Powell to lower interest rates.

Richardson from ADP noted that although hiring has slowed, wage growth remains robust. Those changing jobs have seen their wages increase by 7%, while those staying put have experienced a 4.5% rise. The ADP report, created in collaboration with the Stanford Digital Economy Lab, is based on employment data from over 25 million American private sector workers.

The U.S. government is scheduled to release the May nonfarm payroll report on Friday, which is expected to show a slowdown in employment growth compared to April, with the unemployment rate remaining stable.