Clear signs of a slowing labor market echoed through Wall Street on Wednesday, after private-sector job growth plunged to a more than two-year low, stoking investor concerns that trade headwinds are starting to bite while fueling President Donald Trump‘s pressure on the Federal Reserve to lower interest rates.

U.S. private employers added just 37,000 jobs in May, down from 62,000 in April, an Automatic Data Processing Inc. National Employment report showed Wednesday.

The outcome sharply missed economists’ expectations of 115,000 and marked the lowest reading since March 2023.

“ADP number out!!! “Too Late” Powell must now lower the rate. He is unbelievable!!! Europe has lowered nine times!,” Trump wrote on Truth social, shortly after the release.

"After a strong start to the year, hiring is losing momentum," said Nela Richardson, chief economist at Automatic Data Processing Inc. "Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers."

In May, workers who stayed in their roles saw year-over-year wage growth of 4.5%, a steady pace from previous months. Those who changed jobs saw pay rise by 7%, also unchanged from April's revised figure.

While ADP's figures often differ from the official government data, the weak print adds weight to expectations of a broader labor market slowdown. The Bureau of Labor Statistics will publish its May Employment Situation Report on Friday, with nonfarm payrolls expected to rise by 130,000—down from April's 170,000 gain.

Market Reactions

The dollar tanked minutes after the release, with the greenback sliding past 1.14 against the euro. The Invesco DB USD Index Bullish Fund ETF – which tracks the broader U.S. dollar index (DXY) – is down 0.5% in the premarket.

Futures on major U.S. indices were broadly steady by 8:25 a.m. in New York. On Tuesday, the SPDR S&P 500 ETF Trust ( SPY ) closed 0.6% higher.

Yields on 2-year U.S. Treasury notes dropped to 3.92% as traders ramped up bets on upcoming Federal Reserve rate cuts. The 10-year yield also slipped, falling 5 basis points to 4.41%.

Fed funds futures now imply two interest rate cuts by the end of the year, with the first move expected to come in October, as per CME FedWatch tool.

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