Breaking: US ADP Employment Drops by 33K in June, Missing Forecasts

US ADP Employment Change Drops by 33K in June, Sharply Missing Expectations

In a surprise to markets, US private-sector employment fell by 33,000 in June, according to the latest report from Automatic Data Processing, Inc. (ADP). The result marks a sharp miss compared to economists’ expectations of a 95,000 job gain.

The figure also reflects a downward revision to May’s data, now showing a gain of only 29,000 jobs, compared to the previously reported 37,000.

What the Numbers Say

MonthActual ChangeForecastPrevious (Revised)June-33,000+95,000+29,000

The disappointing reading comes ahead of the official US Nonfarm Payrolls (NFP) report, due Thursday, and is likely to influence short-term expectations around Federal Reserve monetary policy.

Fed Policy Implications

With labor market data showing further signs of weakness, pressure could increase on the Federal Reserve to consider interest rate cuts sooner, especially if Thursday’s NFP report also comes in soft.

The CME FedWatch Tool already reflects a strong probability of a rate cut at the September FOMC meeting, and today’s data may strengthen that forecast.

Market Reaction and Outlook

• US Dollar (USD): Mixed performance as traders await confirmation from NFP.
• Equities: Opened slightly weaker on labor market concerns.
• Treasuries: Yields dip modestly as rate-cut odds increase.

Market participants will now shift their full attention to tomorrow’s NFP figures, which are expected to show a gain of 160K jobs. A downside surprise could accelerate a broader USD correction and influence global asset prices.

Related Tredu Reads:

• NFP Preview: Why June’s Jobs Report Is Critical
• How ADP and NFP Differ: A Trader's Guide
• Fed Rate Cuts on the Horizon? What Traders Need to Know