Lower-than-expected Q1 GDP and the ADP Employment Report have sent the market sinking ahead of the open.

• 8:15 AM ET - ADP Employment Report (April) Forecast: 110,000 | Previous: 155,000 | Actual 62,000
• 8:30 AM ET GDP (Q1 2025) Forecast: 0.4% | Previous: 2.4% | Actual -0.3%

GDP (Q1 2025): Economy contracted by 0.3%
The U.S. economy contracted by 0.3% in the first quarter of 2025, marking its first decline since 2022. This unexpected downturn has sparked recession fears, largely driven by a rise in imports as businesses and consumers rushed to avoid tariffs imposed in early April.

U.S. Q1 2025 GDP contracted by 0.3%, source: bea.gov

ADP Employment Report (April): +62k jobs in private sector

The April ADP Employment Report showed a significant slowdown in hiring, with private payrolls increasing by only 62,000, far below expectations. This decline reflects weakening demand for labor amid economic uncertainty, particularly in sectors like education, health services, and professional and business services, which saw job losses. Although layoffs remain relatively low, the report highlights concerns about decreasing labor demand, which could be further exacerbated by the ongoing trade war and tariffs.

Nela Richardson Chief Economist, ADP said

Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data. It can be difficult to make hiring decisions in such an environment.