Get the latest market trends in your inbox

Stay on top of the latest market trends and economic insights with the Axios Markets newsletter. Sign up for free.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Minneapolis-St. Paul

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa-St. Petersburg news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa-St. Petersburg

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

The private sector added just 27,000 jobs in May — the fewest since the economic expansion began — according to the ADP employment report, which tracks the employers of about 24 million workers. The number was way below economists' expectations of 173,000 job gains and a steep drop-off from April's 275,000 increase in jobs.

What's happening: Small businesses — which ADP counts as companies that employ up to 49 people — saw the steepest decline in employment, with payrolls dropping by 52,000, continuing a pattern of pain for smaller companies.

Why it matters: "Smaller firms are more likely to accelerate or slow their hiring decisions in response to economic developments," Luke Tilley, chief economist at Wilmington Trust, tells Axios.

  • "A 25-person company is far more likely to pause than a large corporation with a more bureaucratic structure," Tilley says.
  • Small businesses are also struggling to fill open positions and don't have the resources to compete with larger firms for talent, Mark Zandi, chief economist at Moody's Analytics, tells Axios.

What to watch: The ADP report is seen as a barometer of the official government release that comes later in the week, but it's not perfect. The figures have "under- and overshot the preliminary official private-payroll tally by an average of 83,000 jobs," according to the WSJ.

  • Zandi told reporters that Friday’s jobs report — which, unlike the ADP report, includes government workers — might be more “juiced up” relative to the ADP number as the government ramps up hiring for the 2020 Census.

Go deeper

Senate Armed Services chair dismisses Trump threat to veto defense bill

Sen. Jim Inhofe. Photo: Anna Moneymaker/Pool/AFP via Getty Images

Sen. Jim Inhofe (R-Okla.), chair of the Senate Armed Services Committee, told reporters Wednesday that he plans to move ahead with a crucial defense-spending bill without provisions that would eliminate tech industry protections, defying a veto threat from President Trump.

Why it matters: Inhofe's public rebuke signals that the Senate could have enough Republican backing to override a potential veto from Trump, who has demanded that the $740 billion National Defense Authorization Act repeal Section 230 of the Communications Decency Act.

Scoop: Uber in talks to sell air taxi business to Joby

Illustration: Sarah Grillo/Axios

Uber is in advanced talks to sell its Uber Elevate unit to Joby Aviation, Axios has learned from multiple sources. A deal could be announced later this month.

Between the lines: Uber Elevate was formed to develop a network of self-driving air taxis, but to date has been most notable for its annual conference devoted to the nascent industry.

Setting the Biden-era cybersecurity agenda

Illustration: Annelise Capossela/Axios

The Biden administration will face a wide array of cybersecurity challenges but can take meaningful action in at least five key areas, concludes a new report by the Aspen Cybersecurity Group.

Why it matters: Cybersecurity policy is a rare refuge from Washington's hyperpartisan dysfunction, as shown by the recent work of the bipartisan Cyberspace Solarium Commission. President-elect Joe Biden should have a real opportunity to make progress on shoring up the nation's cybersecurity and cyber capabilities without bumping up against a likely Republican-controlled Senate.