President Donald Trump wants an economy that grows, creates jobs, and gives him reasons to boast about his strategy. But the latest employment report delivered a troubling message: in May, the U.S. private sector added only 37,000 jobs—its weakest performance since 2023 and well below expectations. In April, the number had been 60,000. The data, released by payroll firm ADP, triggered an immediate reaction from Trump, who turned his frustration toward the Federal Reserve.

“‘Too Late’ Powell must now LOWER THE RATE,” Trump posted on his Truth Social platform, intensifying his pressure on Federal Reserve Chair Jerome Powell, despite the central bank’s independence by law.

The message is clear: Trump needs the economy to keep moving forward. But as ADP Chief Economist Nela Richardson warned, “hiring is losing momentum” after a strong start to the year. Wage growth, she added, was “little changed in May.” The overall picture suggests a slowdown, particularly in sectors dependent on consumer spending and stable supply chains.

Wages Stall, Some Sectors Shrink

According to the ADP report, some service-providing industries such as leisure and hospitality and financial activities still logged job gains. But goods-producing sectors like mining and manufacturing suffered net job losses. Other service areas—such as trade, transportation, business services, and education or health services—also posted declines.

Wage growth for workers who stayed in their jobs remained flat at 4.5%. Those who switched jobs saw a 7.0% increase, highlighting that job movement continues to be a strategy for better pay, but also showing employer caution in raising wages across the board.

Tariffs in the Background

This hiring slowdown comes as the U.S. economy struggles with the effects of Trump’s renewed tariff agenda. Since returning to the presidency, he has imposed a 10% tariff on most trading partners and raised duties on dozens of economies, including the European Union. Those increases have been temporarily paused until early July—but the impact is already being felt.

The case of China stands out. After months of tit-for-tat tariffs, Washington and Beijing reached a temporary deal last month to reduce some of the levies. But by then, global supply chains were already tangled.

“Manufacturing employment is suffering from higher input costs and disruptions to supply chains. At least one vehicle producer was forced to idle production during the first half of May; that is reminiscent of the pandemic,” warned KPMG Chief Economist Diane Swonk in a recent note.

Mounting Pressure on the Fed

The Federal Reserve has cautiously begun to lower interest rates from the high levels held in recent years to fight inflation. But officials are moving slowly, watching closely for signs that prices are truly cooling.

Trump, however, sees the weak employment data as reason enough to demand immediate action. In his view, lower interest rates would reduce borrowing costs, boost spending, and help preserve economic momentum as he heads into a challenging year.

There is another pressure factor: the fiscal issue. Despite the effort to cut expenses, the task has not had a happy ending and this generates additional pressures on two fronts: 1) interest rates in the capital markets and 2) on prices.

A Risky Game

Analysts agree that Trump is playing a complex game. On one hand, his tariffs are meant to protect American industries and strengthen his negotiating position. On the other hand, he needs to avoid an economic slowdown that could hurt his political standing.

The numbers don’t lie: weaker job creation, flat wages, and halted factories aren’t the kind of headlines any president wants. And even if the Fed cuts rates, the lingering effects of the trade war could continue to weigh on key sectors.

A Quiet Warning

The official employment figures from the Labor Department are due Friday, but the ADP report serves as an early warning sign. For Latinos and other vulnerable groups, the stakes are especially high: they are overrepresented in sectors like manufacturing, transportation, and hospitality—those most affected by supply chain instability and economic uncertainty.

The big question remains: Can Trump reshape global trade without jeopardizing jobs at home? The answer is still unfolding.