Private NFP continues to be sustained by large firm hiring.

Figure 1: Change in employment from May 2025 in firms with less than 500 employees (blue), in firms with 500 and more employees (tan), both in 000’s, s.a. Source: ADP via FRED, and author’s calculations. 

The financial accelerator approach (e.g., BBG, 1996)implies that smaller firms (with less collateral) will evidence a slowdown sooner than larger firms. No similar divergence (with <500K firm employment declining) occurs over the 2010-2024 period.

For comparison, in the runup to the 2007-09 recession, small firm employment declines led large firm by nearly a year.

Figure 2: Change in employment from May 2025 in firms with less than 500 employees (blue), in firms with 500 and more employees (tan), both in 000’s, s.a. NBER defined peak-to-trough recession dates shaded gray. Source: ADP (discontinued series) via FRED, and author’s calculations.