US President Donald Trump called on Federal Reserve Chair Jerome Powell to lower interest rates again on Wednesday after ADP said the pace of hiring in the private sector fell to its lowest levels since March 2023. The president’s comment is the latest in a series urging the central bank to lower rates.

President Trump has repeatedly called on Fed Chair Jerome Powell to lower interest rates.

“ADP NUMBER OUT!!! ‘Too Late’ Powell must now LOWER THE RATE. He is unbelievable!!!” Trump posted on Truth Social. The Fed declined to comment on Trump’s remarks.

ADP said the private sector added 37,000 jobs in May, down from a revised 60,000 in April. The latest employment gains reported by ADP were lower than the 130,000 jobs expected by economists surveyed by FactSet.

“After a strong start to the year, hiring is losing momentum,” said Nela Richardson, ADP’s chief economist. “Pay growth, however, was little changed in May, holding at robust levels for both job-stayers and job-changers.”

Over the course of Trump’s calls for Powell to slash rates, Fed officials have reiterated that the U.S. economy remains on solid footing and have indicated they will likely remain in a wait-and-see mode until the economic effects of the Trump administration’s higher tariffs and other federal policy changes become clearer. The economy shrank at an annual rate of 0.2% in the first quarter, according to the Bureau of Economic Analysis’ second estimate released in May.

Inflation, however, has slowed to 2.1% year over year in April as measured by the personal consumption expenditures price index. Many economists expect price growth will pick up in the coming months as tariffs weigh on the costs of imported goods.

While the ADP data is unwelcome news, the survey is rarely an accurate predictor of the Bureau of Labor Statistics’ payrolls report, set to be released on Friday. Economists expect U.S employers added a total of 130,000 public- and private-sector jobs in May.

Pantheon Macroeconomics’ senior U.S. economist Oliver Allen called the ADP report “more noise than signal,” and suggested ignoring it. Allen pointed out that in April, ADP’s 62,ooo gain in private payrolls fell short of the number for the government’s private payrolls growth of 167,ooo in the same month.

“The extent of this miss [in April] was no aberration,” Allen added, noting that ADP’s monthly private-sector payroll growth has been off from the BLS figure by an average of 84,000 since the data provider’s methodology was overhauled in August 2022.

While ADP’s jobs data doesn’t match the BLS statistics, the broader trends revealed by the two tend to be similar and show that hiring is on a slower trajectory this year.

Most economists expect the softening in the labor market to be gradual, rather than a sudden drop. Tuesday’s Job Openings and Labor Turnover Survey showed an uptick in job openings in April, but has been on a downward trend for the first three months of the year. Business surveys and sentiment indexes have also consistently shown weaker hiring plans.

The labor market provided a welcome cushion in recent years against higher inflation, something that won’t likely be in place now to offset slower economic growth and the threat of tariff-induced price increases, writes Claudia Sahm, chief economist for New Century Advisors.

“It’s clear that the labor market today will not offer the same buffer as it did in 2022-23. While that implies less protection from a recession, it may reduce the upside risks to inflation somewhat, as businesses may find it more difficult to pass on tariff-driven costs to consumers than they did pandemic-driven ones,” Sahm writes.

The central bank has a dual mandate of price stability and maximum employment. Inflation is still above the Fed’s 2% target, and core PCE, which strips out volatile food and energy prices, climbed 2.5% year over year in April, down from 2.7% in March.

Interest rates remain a key tool in achieving both of the Fed’s goals. The Federal Open Market Committee in March penciled in two quarter-point rate cuts this year. The group will update that projection later this month.