If you’re not familiar with it, ADP is the largest payroll processing company in the United States. As such its reports on payroll numbers garner some attention as Shannon Carroll reports at Quartz:
The U.S. labor market just hit a serious speed bump.
Private employers cut 33,000 jobs in June, according to fresh data on private payroll numbers from ADP — the worst showing in more than two years (since March 2023) and a surprise move in the wrong direction. After months of sluggish but steady hiring, the engine appears to have stalled.
The numbers came in sharply below economists’ expectations, which aimed for gains between 95,000 and 103,000. It’s a stark reversal from May’s revised modest growth of 29,000 jobs (down from 37,000).
And the losses weren’t spread evenly: June’s decline was largely driven by small- and medium-cap, service-producing companies. Large companies (with 500-plus employees) added jobs. Professional and business services took a massive hit, shedding 56,000 roles, while education and health services lost 52,000. Meanwhile, some traditionally volatile sectors — such as leisure and hospitality — managed to notch gains, suggesting a growing mismatch regarding where jobs are growing versus where they’re disappearing.
“Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month,” ADP’s chief economist, Dr. Nela Richardson, said in a statement. “Still, the slowdown in hiring has yet to disrupt pay growth.”
I have a sneaking suspicion that artificial intelligence is a significant part of this downturn in more ways than one.
One of the ways, of course, is that firms don’t know whether the job for which they’re hiring will be more effectively done using generative or agentic artificial intelligence than a human employee or how soon. But there’s another way, too.
I think that employers are using AI for screening and applicants are using AI to prepare applications, resumes, etc. so widely that employers don’t know whether to hire the applicants or not.
I think it’s far simpler. The BLS and ADP surveys routinely diverge for short periods. So on the heels of ADP comes a rather good BLS report, complete with upward revisions to prior periods, not the downward revisions that characterized the Biden era.
The composition gives pause. Many govt jobs. But it’s cute to note that just a couple months ago Joyner and Taylor, along with their sycophants, were decrying the “dismantling of government” and “slashing” of government workers, the most precious and holy workers on the planet. Not much wisdom over there. Just TDS.