Trump seizes on weak jobs report to demand interest rate cuts from Fed
Private sector hiring in the United States nearly stalled in May, with employers adding just 37,000 jobs—the weakest performance in over two years, according to the latest ADP National Employment Report released Wednesday. The figure came in well below April’s downwardly revised 60,000 and missed economists’ expectations of 110,000 by a wide margin.
The disappointing result marks the slowest pace of job growth since March 2023 and signals that the US labour market may be losing momentum after a strong start to the year.
“After a strong start to the year, hiring is losing momentum,” said Dr Nela Richardson, ADP’s chief economist. Despite the hiring slowdown, annual pay growth remained steady at 4.5% for workers staying in their jobs and 7% for job changers—levels ADP described as “robust.”
Services sector masks broader weakness
The headline figure was propped up by gains in leisure and hospitality (+38,000) and financial activities (+20,000). However, these were offset by losses in professional and business services (-17,000), education and health services (-13,000), and trade, transportation and utilities (-4,000).
In the goods-producing sector, manufacturing shed 3,000 jobs, and natural resources and mining lost 5,000, though construction added 6,000.
By company size, small firms (fewer than 50 employees) lost 13,000 jobs, and large firms (500+ employees) shed 3,000. Medium-sized businesses (50–499 employees) were the main source of job creation, adding 49,000.
Regionally, the Northeast posted the largest decline, losing 19,000 jobs—16,000 of them in New England. The South also lost 5,000, while the Midwest and West gained 20,000 and 37,000 respectively.
Trump pressures Fed as election looms
The weak ADP report came just days before the more closely watched Bureau of Labor Statistics (BLS) nonfarm payrolls release, expected to show a 125,000 job increase in May. Though ADP and BLS figures often diverge due to methodological differences, the data adds to recent signs of a cooling labour market.
President Donald Trump seized on the report to ramp up pressure on Federal Reserve Chair Jerome Powell, demanding interest rate cuts to stimulate growth. “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!! Europe has lowered NINE TIMES!” Trump posted on Truth Social.
Trump has been intensifying his criticism of Powell ahead of the Federal Open Market Committee’s meeting in two weeks, where the central bank is expected to keep rates on hold. According to the White House, Trump told Powell in a recent meeting that maintaining high rates was a “mistake” that put the US at a competitive disadvantage with China and Europe.
Fed faces crosswinds from tariffs and global risks
While Powell has insisted that monetary policy must be guided by data, not politics, the Fed is navigating a complex environment shaped by Trump’s tariff policies, persistent inflationary concerns, and softening employment trends.
Fed Governor Lisa Cook noted on Tuesday that the US economy remains “solid,” but acknowledged that “heightened uncertainty poses risks to both price stability and unemployment.”
Despite Trump’s attacks, the Fed is likely to keep its benchmark rate steady at its upcoming June meeting. The European Central Bank, meanwhile, is widely expected to deliver its eighth rate cut since June 2024, as Europe grapples with tepid growth and slowing inflation.
Outlook uncertain as quits, openings stall
While the ADP data suggest waning employer demand, other indicators paint a mixed picture. Job openings rose unexpectedly in April, according to the BLS, but surveys from Indeed and the National Federation of Independent Business point to declining hiring intentions and fewer voluntary quits.
ADP’s June employment report will be released on July 2.
