U.S. private payroll growth weakens for sixth week running

U.S. private sector job growth slowed for a sixth straight week in May, according to data from ADP, signaling a softening labor market trend.

The payrolls processor reported on Wednesday that private employment rose by 152,000 last month, down from an upwardly revised 188,000 in April. The figure fell short of economists' expectations, which had anticipated an increase of 170,000.

The ADP National Employment Report, produced in collaboration with the Stanford Digital Economy Lab, tracks employment changes among private companies with 500 or fewer workers. The latest reading marks the weakest monthly gain since January, extending a six-week streak of decelerating growth.

By sector, the service-providing industries added 103,000 jobs, led by gains in trade, transportation and utilities. Goods-producing sectors, including construction and manufacturing, added 49,000 positions. Payrolls in the financial activities segment also rose modestly.

The report comes ahead of Friday’s nonfarm payrolls data from the U.S. Bureau of Labor Statistics, which will provide a broader snapshot of the labor market. Economists expect the official jobs report to show an increase of 180,000 in May, down from 175,000 in April.

ADP’s chief economist, Nela Richardson, noted that hiring remains positive but is moderating as demand cools. "The labor market is still expanding, but at a slower pace," she said. "Wage growth is stabilizing, which may reflect a balance between labor demand and supply."

The data follows recent indications of a cooling U.S. economy, with inflation pressures easing and consumer spending showing signs of moderation. Investors will closely watch the upcoming jobs report for further clues on the Federal Reserve’s policy trajectory amid mixed economic signals.