US private payrolls gains slow in June; planned layoffs drop 53%

• Private payrolls rose 98,000 in June versus 122,000 in May, missing economist forecasts of 118,000 new jobs
• Planned layoffs fell 53% in June to 45,849, with first-half 2026 job cuts down 40% compared to the same period in 2025
• Job openings stood at 1.04 per unemployed person in May, with layoffs concentrated in technology sector due to AI-driven restructuring

Market Summary: US Private Payrolls and Labor Market Update

Key Employment Figures:

U.S. private payrolls increased by 98,000 jobs in June, falling short of the 118,000 forecast by economists, according to the ADP National Employment Report released July 1. This follows an unrevised 122,000 gain in May. The more comprehensive Bureau of Labor Statistics employment report, due Thursday, is expected to show private payrolls rising 110,000 and overall nonfarm payrolls increasing 110,000, with unemployment holding steady at 4.3% for the fourth consecutive month.

Layoff Trends:

Planned layoffs dropped significantly, with Challenger, Gray & Christmas reporting a 53% decline to 45,849 in June. For the first half of the year, employers announced 443,604 job cuts, down 40% compared to the same period last year. Technology sector cuts remain concentrated, with artificial intelligence reshaping workforce strategies.

Hiring Activity:

Planned hiring fell 44% from May to 10,933 workers in June. Year-to-date, companies announced plans to hire 91,405 workers, up 10% versus the first half of 2025, though hiring levels remain considerably lower than 2020 levels.

Market Implications:

The labor market appears to be stabilizing after last year's difficulties. Job openings stood at 1.04 per unemployed person in May, suggesting balanced conditions. However, the slower-than-expected payroll growth and reduced hiring plans may signal modest economic cooling. The disconnect between ADP data and BLS estimates means Thursday's official employment report will be critical for assessing Fed policy direction under Chairman Kevin Warsh. The concentration of layoffs in technology, driven by AI adoption, highlights ongoing structural shifts in the labor market.