Around 33,000 Jobs Lost in June In Hiring 'Slowdown'

Newsweek

4 days ago

Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
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More than 30,000 jobs were lost during the month of June as companies begin what many are viewing as a hiring 'slowdown,' according to a new report.
Private employers shed 33,000 jobs, with the losses most concentrated among professional and business services, education and health services, ADP's new national employment report found.
One expert told Newsweek it's a "troubling sign."
Why It Matters
In recent years, the job market has pushed toward a candidate-driven market, with employees likely to jump jobs and file resignations for higher pay and more work-life balance flexibility.
However, the data shows that the tide might be turning, with a surge in layoffs in the tech and retail sectors. A study from outplacement firm Challenger, Gray & Christmas (CGC) reported that June job cuts marked the highest total for a three-month period since 2020 during the COVID-19 pandemic, when 1.2 million jobs were lost.
A "Help Wanted" sign is seen at a Golden Krust location on Church Avenue on June 07, 2024 in the Flatbush neighborhood of Brooklyn borough New York City.
A "Help Wanted" sign is seen at a Golden Krust location on Church Avenue on June 07, 2024 in the Flatbush neighborhood of Brooklyn borough New York City.
Michael M. Santiago/Getty Images
What To Know
The hiring slowdown may be due to employers course correcting after strong job gains earlier in the year.
Small businesses may especially be feeling the strain, as these businesses with 1 to 19 employees saw a decline of 29,000 jobs and those with 20 to 49 employees cut 18,000 jobs, according to the report.
Large corporations, defined as those with 500 employees or more, meanwhile, added 30,000 jobs.
Industry-wise, professional and business services declined by 56,000 jobs, while education and health services went down by 52,000. Leisure, hospitality and manufacturing saw gains between 15,000 and 32,000.
The new data could signify that the job market is cooling but not collapsing entirely, experts say.
With hiring slowing, even with the job losses concentrated in a few sectors, the data is a "troubling sign," according to Alex Beene, a financial literacy instructor for the University of Tennessee at Martin.
"The unemployment rate has been one of the longstanding positive signs for the economy over the last few years, even as Americans faced inflationary pressures on all ends. The key factor to blame is uncertainty," Beene said.
"Given the recent upheaval in economic policy with everything from tariffs to potential cuts to programs, employers are concerned what the next year will look like, and that concern is unfortunately manifested in both cutting positions and not refilling roles as employees leave or retire."
What People Are Saying
Nela Richardson, chief economist at ADP, said in the report: "Though layoffs continue to be rare, a hesitancy to hire and a reluctance to replace departing workers led to job losses last month. Still, the slowdown in hiring has yet to disrupt pay growth."
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: "This report doesn't indicate a slowdown; we're already in one. The bigger question is, why is the stock market ignoring it?
"This market isn't tied to economic fundamentals anymore. It's being propped up by a small group of mega-cap tech names. Just five companies—what I call 'TAANG'—now make up over 22% of the S&P 500 index. The broader economy may be slowing, but these few stocks are distorting the overall picture."
Michael Ryan, a finance expert and the founder of MichaelRyanMoney.com, told Newsweek: "33,000 jobs lost isn't catastrophic, but it's the direction that's got my attention. Like when your car starts making that weird noise. It might be nothing, but your gut tells you it isn't a good sign.
"So why are we seeing this? Companies got spooked. They're reading the same headlines we are. Inflation lingering, the Fed playing hardball with interest rates due to tariff's, consumers tightening their belts. When CEOs get nervous, the first thing they do? Hit the brakes on hiring. It's Corporate 101: when you're not sure what's coming, you batten down the hatches."
What Happens Next
Ryan said the job market still remains strong despite the slowdown, with unemployment at a historic low of 4.2 percent for May.
"But what we're seeing is this shift from 'hire everyone with a pulse' to 'let's be a little more selective.' Companies are getting pickier, taking their time, really thinking through each hire."
It could be a "warning shot" for the broader economy, Ryan said.
"What I tell people is this: if you're job hunting right now, don't panic, but do adjust your expectations. It might take a little longer, you might need to be a bit more flexible, but good people are still getting hired," Ryan said.