"Small non-farm" surprises! The growth in ADP employment in the United States in April is far below expectations, marking the lowest increase since July last year.

In April, the "mini non-farm payrolls" in the United States were much lower than expected. The hiring pace of US businesses in April slowed to the lowest level in nine months, indicating a weakening demand for workers amidst economic uncertainty. Data from ADP Research Institute shows that private sector employment in the United States increased by 62,000 in April, the smallest increase since July 2024, significantly lower than the expected 115,000. Employee numbers in the education and health services, information, professional and business services sectors all saw direct declines. ADP Chief Economist Nela Richardson stated in a statement on Wednesday: "Uncertainty is the keyword today. Employers are trying to reconcile policy and consumer uncertainty with a series of fundamentally positive economic data. In such an environment, it is difficult to make hiring decisions." Tariffs imposed by Trump on US trading partners have caused some companies to halt spending plans, potentially leading to a weakening of labor demand in the coming months. More and more companies are announcing layoffs, including federal contractors whose contracts have been canceled by government efficiency agencies. A monthly survey at the University of Michigan shows that consumers are still concerned about rising unemployment rates next year and slowing income growth. Federal Reserve Chairman Powell emphasized the need for the Federal Reserve to ensure that tariffs do not lead to sustained inflation, warning that the Federal Reserve may have to choose between containing price pressures and supporting the labor market. A report released by ADP in collaboration with the Stanford Digital Economic Laboratory shows mixed wage growth data. Wages for employees in April grew by 4.5% year over year, slightly slower than in March. Wage growth for job switchers accelerated, rising from 6.7% in March to 6.9% in April. Another data released by the US Bureau of Labor Statistics on Wednesday showed that the Employment Cost Index, including wages and benefits, rose by 0.9% in the first three months of this year, in line with market expectations. Compared to a year ago, the index rose by 3.6%, the lowest increase since 2021. On Tuesday, the number of job vacancies in the United States fell from a revised 7.48 million in February to 7.19 million, the lowest level since September last year. This number is close to the level in 2020 and lower than the estimates of all economists surveyed by Bloomberg. Combined with ADP employment data, this seems to indicate that demand for labor is weakening as employers put spending plans on hold until they have a clearer understanding of Trump's policies. This may be bad news for the non-farm employment report to be released on Friday, as the median forecast shows a significant slowdown in job growth and a steady unemployment rate. Another economic data released on Wednesday also paints a bleak economic outlook. The US economy contracted in the first quarter, with a large accumulation of imported goods by businesses to avoid rising costs being a major drag, highlighting the disruptive impact of Trump's chaotic tariff policies. Preliminary data from the US Department of Commerce shows that real GDP in the first quarter of the United States shrank at an annualized rate of 0.3%. The risk of a US economic recession has surged. The US financial trading and forecasting platform Kalshi currently predicts a 74% probability of a US economic recession this year.