U.S. Private Job Growth Slows in July as Pay Gains for Job Changers Accelerate
U.S. private-sector hiring slowed in July, according to the latest ADP National Employment Report, even as wage growth for workers changing jobs reached its fastest pace in nearly a year.
Private employers added 44,000 jobs during the month, down from a revised 95,000 in June. Meanwhile, workers who changed employers over the past 12 months saw median annual pay growth accelerate to 4.4%. This suggests that labor shortages persist in parts of the economy.
Hiring Moderates Across the Private Sector
According to ADP, July’s hiring figures reflect a slower pace of employment growth compared with previous months.
ADP Chief Economist Nela Richardson said wage trends among job changers continue to provide insight into labor market conditions.
“Job-changers are highly sensitive to real-time economic conditions, and their rapid pay growth implies supply constraints in parts of the labor market,” Richardson said. “Typical hiring patterns, meanwhile, are changing as employers react to shifting macro-economic conditions.”
The report suggests that while employers are hiring more cautiously, competition for workers remains strong in certain occupations.
Service Industries Continue to Drive Employment
Service-providing industries added 47,000 jobs during July, offsetting a decline of 3,000 jobs in goods-producing industries.
Among service sectors:
- Education and health services added 36,000 jobs
- Financial activities gained 10,000 jobs
- Professional and business services increased by 9,000 jobs
- Other services added 6,000 jobs
- Information employment rose by 5,000 jobs
However, hiring slowed in several industries.
Employment declined by:
- 11,000 jobs in leisure and hospitality
- 8,000 jobs in trade, transportation, and utilities
Goods-Producing Industries See Slight Decline
Employment in goods-producing industries declined modestly during July.
The largest decrease occurred in natural resources and mining, which lost 6,000 jobs.
Meanwhile:
- Construction added 1,000 jobs
- Manufacturing gained 2,000 jobs
Overall, gains in construction and manufacturing were not enough to offset losses elsewhere within the goods-producing sector.
Wage Growth Remains Resilient
Though overall hiring slowed, the report indicates that employers continue competing for experienced workers.
The 4.4% median annual pay increase for job changers represents the fastest rate recorded in nearly a year, suggesting that labor demand remains strong in parts of the economy despite softer hiring activity.
ADP’s findings are based on anonymized weekly payroll data covering more than 26 million private-sector employees across the United States and are compiled in collaboration with the Stanford Digital Economy Lab.
What Comes Next
July’s ADP report points to a labor market experiencing slower employment growth while continuing to see wage gains for workers changing jobs.
Upcoming employment data and future payroll reports will provide additional insight into whether July’s moderation reflects a temporary slowdown or the beginning of a broader shift in labor market conditions.
