US ADP Employment Misses Forecasts, Wage Growth Holds Steady

US private-sector hiring slowed more than expected in June. ADP employment rose 98,000, below the 118,000 consensus and down from May’s 122,000. The report points to a gradual cooling in labor demand ahead of Thursday’s Non-Farm Payrolls release. Wage growth remained relatively resilient.

Hiring continued to be driven by the services sector, which added 96,000 jobs. Goods-producing industries contributed just 2,000. Employment gains were broad-based across business sizes. Small firms led with 53,000 new jobs. Medium-sized businesses added 29,000 and large companies 25,000.

ADP Chief Economist Nela Richardson said the hiring trend reflects “both supply and demand,” noting that while job seekers are taking longer to find work, labor shortages persist in some industries. “For now, the overall effect is a slowdown in job creation,” she added.

The report offered a mixed signal on wage pressures. Median annual pay growth for workers staying in their jobs was unchanged at 4.4%. Pay gains for job changers accelerated to 6.6%. The acceleration in job-changer wages suggests that employers are still competing for talent in certain roles, even as overall hiring slows.

The data adds to the case for a softer labor market, which could influence the Federal Reserve’s rate path. The next test is Thursday’s Non-Farm Payrolls report. For forex traders, the dollar’s reaction will depend on whether NFP confirms the slowdown. See our forex market analysis for positioning insights. The EUR/USD profile and GBP/USD profile offer specific pair analysis.