EL7.AI
Macro EconomyMedium•1 July 2026•
1 min read

ADP private payrolls miss expectations in June, signaling labor market cooling

Key Facts

1U.S. private sector employment grew by 98,000 in June, below the forecast of 110,000.
2Annual pay was up 4.4% in June according to the ADP National Employment Report.

As the Federal Reserve continues to assess labor market data to guide monetary policy, today's ADP National Employment Report showed the private sector added just 98,000 jobs in June, below the 110,000 consensus estimate and down from May's 122,000. Annual pay growth came in at 4.4%, signaling moderate wage pressures remain.

The weak reading follows a mixed set of recent US economic data. GDP grew 2.1% in the first quarter (above the 1.6% forecast), while the annual PCE price index rose to 4.1% in May, per market data. Job creation was concentrated in education and health services, which added 48,000 positions, reflecting softer labor demand in other sectors.

Investors now turn to the official nonfarm payrolls report due later this week, which may offer a clearer signal on the labor market's trajectory. Against this backdrop, expectations for a near-term rate hike are fading, though inflation remains above target. Any further slowdown in hiring could strengthen market bets on an eventual rate cut later this year.