Background
The ADP employment report, released by Automatic Data Processing, measures private sector job growth in the U.S. and is often seen as a precursor to the official government jobs report. The May 2025 data, released on June 4, 2025, showed weaker-than-expected job growth, prompting reactions from political figures like former President Donald Trump.
Trump’s Reaction
Following the release, Trump used Truth Social to demand that Powell cut interest rates, criticizing his hesitation and referring to him as “Too Late” Powell, suggesting urgency due to the weak job numbers
Federal Reserve’s Stance
As of June 4, 2025, there is no direct statement from Powell or the Federal Reserve specifically addressing the May ADP data. The Fed’s most recent meeting on May 6-7, 2025, held rates steady at 4.25%-4.5%, indicating a cautious approach, waiting for more economic data before making changes
Survey Note: Detailed Analysis of U.S. May 2025 ADP Data and Trump’s Call for Rate Cuts
This note provides a comprehensive analysis of the U.S. May 2025 ADP employment report, Donald Trump’s reaction, and the Federal Reserve’s stance, addressing the context and implications as of June 4, 2025, at 07:03 AM PDT. The analysis is based on recent news articles and economic reports, reflecting the current economic and political landscape.
Introduction and Context
The Automatic Data Processing (ADP) employment report is a monthly private sector employment gauge, released by ADP, one of the largest payroll processors in the U.S. It provides an early insight into job growth, typically released on the first Wednesday of the month following the month in question, and is often seen as a precursor to the official Nonfarm Payrolls report from the Bureau of Labor Statistics. For May 2025, the report was released on June 4, 2025, showing weaker-than-expected job growth, which led to reactions from political figures, including former President Donald Trump, who called for Federal Reserve Chairman Jerome Powell to cut interest rates immediately.
May 2025 ADP Employment Data
According to the ADP employment report, private sector job creation in May 2025 increased by only 37,000 jobs, down from a downwardly revised 60,000 in April 2025
This weaker-than-expected data raised concerns about broader economic conditions, especially given the timing, just two days before the more closely watched Nonfarm Payrolls report, expected to show a gain of 125,000 jobs and an unemployment rate steady at 4.2%
Trump’s Reaction and Call for Rate Cuts
Following the release of the ADP data, Donald Trump, who has been vocal about monetary policy, used Truth Social to demand that Powell cut interest rates immediately. On June 4, 2025, Trump wrote, “ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE,” reflecting his frustration with Powell’s reluctance to ease monetary policy
. This nickname, “Too Late” Powell, is part of Trump’s ongoing criticism, branding him for not cutting rates despite economic indicators suggesting the need for stimulus.
Trump’s call for rate cuts aligns with his broader pressure campaign on the Fed, as seen in previous statements where he labeled Powell a “major loser” and urged preemptive cuts, especially in the context of tariff-related economic uncertainty
Federal Reserve’s Stance and Powell’s Response
As of June 4, 2025, there is no direct statement from Jerome Powell or the Federal Reserve specifically addressing the May 2025 ADP data. The Fed’s most recent Federal Open Market Committee (FOMC) meeting was held on May 6-7, 2025, before the ADP data was released, and resulted in interest rates being held steady at the 4.25% to 4.5% range, where they have been since December 2024
Prior to the ADP data, Powell had expressed concerns about the economic outlook, noting that larger-than-expected tariffs could boost inflation and slow growth, but it was too soon to determine the right response
Given the timing, with the ADP data released on June 4, 2025, and no FOMC meeting scheduled immediately after, it’s likely that the Fed has not yet responded to this specific data point. The Fed typically considers a broad range of indicators, including Nonfarm Payrolls, inflation data, and other economic reports, before making monetary policy decisions, rather than reacting solely to the ADP report, which sometimes correlates poorly with official data
Comparative Analysis of Reactions
To better understand the controversy, consider the following table comparing key reactions to the May 2025 ADP data:
Stakeholder | Position | Reasoning |
---|---|---|
Donald Trump | Urges Immediate Rate Cuts | Weak ADP data (37,000 jobs) indicates need for economic stimulus, calls Powell “Too Late” |
Jerome Powell/Fed | No Direct Response as of June 4, 2025 | Held rates steady in May, wait-and-see approach, need more data, tariff uncertainties |
ADP Chief Economist Nela Richardson | Notes Weak Hiring | Hiring at lowest since March 2023, despite robust pay growth, reflects labor market slowdown |
This table illustrates the contrast between Trump’s urgency for rate cuts and the Fed’s cautious stance, highlighting the political and economic tensions surrounding monetary policy.
Economic Implications and Market Reactions
The weak ADP data has raised concerns about the labor market, potentially influencing market expectations for future Fed actions. Financial markets often react to ADP data, with algorithms pushing assets based on the outcome, though the correlation with Nonfarm Payrolls can vary
Research suggests that the May 2025 ADP employment report showed a significant slowdown, with only 37,000 jobs added, below expectations, prompting Trump to demand immediate interest rate cuts from Powell, whom he labeled “Too Late” Powell. However, as of June 4, 2025, the Federal Reserve has not responded directly to this data, maintaining a wait-and-see approach after holding rates steady in May 2025. This reflects the Fed’s cautious stance amid economic uncertainties, particularly from trade policies, and highlights the ongoing tension between political pressure and monetary policy independence.
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