Private sector employment growth significantly decelerated in July, according to data released Wednesday by payroll processing firm ADP. Companies added 44,000 workers during the month, marking a sharp decline from the previous month’s revised figure of 95,000 and falling short of analyst expectations of 75,000 new positions.
The healthcare sector dominated job creation, accounting for nearly all employment gains as the services industry added 47,000 positions overall. Meanwhile, goods-producing industries contracted slightly with a net loss of 3,000 jobs. Education and health services led the way with 36,000 new openings, while financial services and professional business services contributed smaller gains of 10,000 and 9,000 respectively. Manufacturing and construction saw minimal growth, while trade and transportation experienced job losses.
Compensation dynamics revealed mixed signals in the labor market. Workers who remained in their current positions saw wages grow at 4.4% annually, but job switchers experienced notably stronger pay increases of 7% on average—the highest rate in nearly a year. ADP’s chief economist noted this disparity suggests tightness in certain sectors of the labor market, even as overall hiring momentum slows amid shifting economic conditions.
The July figures represent the smallest monthly job gain since January. The official government employment report is expected later this week, with economists forecasting 83,000 new positions and an unemployment rate holding steady at 4.2%.
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