US private employers added just 37,000 jobs in May 2024, the smallest monthly increase since March 2023. That outcome was well below economists’ expectations of about 110,000 new jobs and down from April’s revised gain of 60,000. While the ADP report shows a marked slowdown, analysts warn it has a spotty record in predicting the official government employment numbers, so the figures should be interpreted cautiously.
Nearly all of the job growth in May came from the services sector, which added roughly 36,000 positions. The gains were concentrated in financial activities, information services and hospitality. By contrast, the goods-producing sector lost about 2,000 jobs as manufacturing and mining employment fell.
Economists say the labor market appears to be cooling gradually amid broader economic uncertainty, with some observers pointing to trade policy and tariff discussions under the Trump administration as a contributing factor to business caution. The upcoming official government payroll report, due Friday, is expected to show stronger overall employment, with forecasts near 130,000 total jobs added for the month.
Although ADP’s private payroll numbers can provide useful short-term insight into hiring trends, they often diverge from the Bureau of Labor Statistics’ nonfarm payrolls. That divergence reflects differences in methodology, sample coverage and timing. As a result, many economists treat ADP as one piece of the puzzle rather than a definitive indicator.
Key takeaways from the May data include the continued dominance of service-sector hiring relative to goods-producing industries and signs of moderation in overall labor demand. Employers in finance, information and hospitality showed selective hiring, while manufacturing and mining remained under pressure. Policymakers and investors will focus on the official jobs report for confirmation of these trends and for guidance on monetary policy and economic outlook.