Private-sector hiring slowed more than expected in June as employers added fewer workers ahead of the closely watched monthly government jobs report, while healthcare-related industries continued to account for the bulk of new employment.
According to payroll processor ADP, private employers added a seasonally adjusted 98,000 jobs in June, below economists’ expectations of 110,000 and down from an unrevised 122,000 in May.
The report comes a day before the US Bureau of Labor Statistics releases its official nonfarm payrolls report, which is expected to show employment growth of about 115,000 jobs and an unemployment rate holding steady at 4.3%.
Healthcare remains the main driver of hiring
Hiring remained heavily concentrated in service industries, with education and health services accounting for 48,000 of the total jobs added during the month.
Almost all of June’s employment gains came from the services sector, which contributed all but 2,000 of the new positions.
Other industries recording payroll growth included trade, transportation and utilities, which added 15,000 jobs, followed by financial activities with 14,000 positions and other services with 8,000.
Natural resources and mining was the only sector to post a decline, shedding 5,000 jobs during the month.
Meanwhile, leisure and hospitality added just 2,000 positions, extending what has been a subdued year for an industry often viewed as a barometer of consumer spending.
“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 labor supply constraints in certain industries,” said Nela Richardson, ADP’s chief economist.
“For now, the overall effect is a slowdown in job creation.”
Small businesses lead employment gains
Hiring was strongest among smaller employers.
Businesses with fewer than 50 employees added 53,000 jobs during June, while medium-sized companies contributed 29,000 positions. Large employers with more than 500 workers added 25,000 jobs.
Wage growth remained relatively stable despite the slower hiring pace.
Annual pay increases for workers who stayed in their current jobs held steady at 4.4%, while employees who switched jobs saw annual wage gains edge up to 6.6%.
ADP’s employment report has diverged from the official government payroll figures in recent months, generally reporting weaker hiring than the Labor Department’s monthly employment data.
Separate report shows layoffs ease but hiring plans remain muted
Separate data released Wednesday suggested layoffs continued to cool, although employers remained cautious about expanding their workforce.
According to Challenger, Gray & Christmas, US-based employers announced plans to cut 45,849 jobs in June, down 53% from the previous month.
For the first six months of 2026, announced job cuts totaled 443,604, representing a 40% decline compared with the same period last year.
“The pace of layoffs cooled considerably in June, similar to plans last June, and as is typical for summer months,” said Andy Challenger, chief revenue officer at Challenger, Gray & Christmas.
“That said, the cuts we are seeing remain concentrated in technology, and artificial intelligence continues to reshape how companies think about headcount.”
Despite fewer layoffs, hiring intentions also weakened.
Companies announced plans to hire 10,933 workers in June, down 44% from May.
Total announced hiring for the first half of the year stood at 91,405, about 10% higher than the corresponding period in 2025, though Challenger noted that hiring activity remains well below levels seen in the years following the pandemic.
The softer hiring outlook comes as workers report growing difficulty finding employment.
A Conference Board survey released on Tuesday showed the share of consumers who believe jobs are “hard to get” rose in June to its highest level in nearly five and a half years, suggesting that while layoffs have moderated, the labor market continues to lose momentum heading into the second half of the year.
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