US Corporate Labor Demand Weakens Amid Economic Uncertainty

In the face of increasing economic uncertainty, the demand for labor from US companies is weakening. The ADP employment data, known as the "mini-Nonfarm Payrolls", saw a significant slowdown in growth in April, far below market expectations.

On Wednesday, data released by ADP Research showed that the number of ADP employment in the US increased by 62,000 in April, the slowest growth rate in nearly nine months. It was less than the expected 115,000, and the previous value was 155,000.

Nela Richardson, the chief economist at ADP, said, "Unease is the keyword today. Employers are trying to strike a balance between policy and consumer uncertainty and a series of generally positive economic data. Making hiring decisions in such an environment can be difficult."

Economic uncertainty poses downside risks, and the labor market is "mixed". The ADP report showed that employment decreased in the education and health services, information, and professional and business services sectors, while recruitment in other sectors was moderate.

Recruitment for production jobs outperformed that for service jobs.

The report also revealed information about wage growth. The wage growth of job - changers was 6.9%, the highest level since December 2024, compared with 6.7% in March; the wage growth of those who stayed in their original positions was 4.5%, slightly slower than in March.

Although the ADP data revealed a slowdown in recruitment, the recently released data is still close to the pre - pandemic average, indicating that the situation of layoffs remains relatively mild. The labor market presents a "mixed" situation.

Some analysts said that Trump's suspension of some tariffs has led some companies to suspend their spending plans, which may lead to a weakening of labor demand in the next few months. In addition, announcements of layoffs by companies, including federal contractors, are increasing as their contracts have been cancelled by the US government's efficiency department.

A monthly survey by the University of Michigan showed that consumers are still worried about an increase in the unemployment rate and a slowdown in income growth in the coming year. Federal Reserve Chairman Jerome Powell emphasized that the Fed needs to ensure that tariffs do not lead to a sustained rise in inflation. He warned that the Fed may have to choose between controlling price pressures and supporting the labor market.

Currently, the market generally expects four interest rate cuts in 2025.