United States private-sector hiring slowed in June as employers added fewer jobs than expected, reinforcing signs of a moderating labour market ahead of the release of the closely watched government employment report.
According to ADP, private payrolls increased by a seasonally adjusted 98,000 positions during the month, down from an unrevised 122,000 in May and below market expectations for a gain of 113,000.
The report serves as a precursor to Thursday's nonfarm payrolls release from the Bureau of Labor Statistics, with Wall Street expecting the U.S. economy to have added 110,000 jobs in June.
Markets are also expecting the unemployment rate to remain unchanged at 4.3%, while average hourly earnings are expected to increase 0.3% for the month and 3.5% from a year earlier.
Healthcare-related industries continued to drive employment growth, with the education and health services sector accounting for 48,000 of the new jobs created during June.
Almost all hiring occurred within the services sector, which added all but 2,000 of the month's new positions.
Other industries recording gains included trade, transportation and utilities, which added 15,000 jobs, followed by financial activities with 14,000 and other services with 8,000.
Natural resources and mining was the only sector to post a decline, shedding 5,000 positions, while leisure and hospitality added just 2,000 jobs, extending a subdued year for an industry often viewed as a gauge of consumer demand.
"The pace of hiring is telling a story of both supply and demand. We know it's taking people longer to find work, but there also are signs of labour supply constraints in certain industries," said Nela Richardson, ADP's chief economist. "For now, the overall effect is a slowdown in job creation."
Wage growth remained stable during the month. Employees who stayed in their existing roles received annual pay increases of 4.4%, while workers changing jobs saw pay growth edge higher to 6.6%.
Hiring was strongest among smaller employers. Businesses with fewer than 50 employees added 53,000 jobs, while medium-sized firms contributed 29,000 positions. Large companies employing 500 or more workers added 25,000 jobs.
Separate data from global outplacement firm Challenger, Gray & Christmas pointed to further easing in labour market pressures, with announced job cuts declining in June and remaining well below levels recorded during the first half of 2025.
U.S. employers announced 45,849 planned layoffs during June, down 53% from the 97,006 cuts announced in May and 4% lower than the 47,999 cuts announced in the same month last year.
Artificial intelligence remained the leading reason cited for workforce reductions.
So far this year, employers have announced 443,604 job cuts, down sharply from 744,308 over the corresponding period in 2025.
Hiring intentions also improved, with companies planning to recruit 91,405 workers during the first six months of the year, up from 82,932 in the first half of 2025.
"The pace of layoffs cooled considerably in June, similar to plans last June, and as is typical for summer months," Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas, said in the report.
"That said, the cuts we are seeing remain concentrated in technology, and artificial intelligence continues to reshape how companies think about headcount."
