According to the ADP report, private sector job growth significantly decreased in July, with a total of 44,000 nonfarm jobs added, falling short of the revised June figure of 95,000 and the Dow Jones forecast of 75,000. The services sector was the sole contributor to job growth, adding 47,000 positions, while goods-producing sectors experienced a decline of 3,000 jobs.
Notably, the education and health services sector led with 36,000 new jobs, reflecting a persistent trend in employment growth within that industry. Other sectors such as financial activities, professional and business services, and other services added 10,000, 9,000, and 6,000 jobs respectively.
Conversely, trade, transportation, and utilities lost 8,000 jobs, while natural resources and mining saw a decrease of 6,000. Manufacturing and construction added minimal jobs, with only 2,000 and 1,000 respectively. The report indicates that smaller firms, particularly those with fewer than 50 employees, were responsible for the majority of new jobs, contributing 23,000 positions.
Pay growth remained stable at 4.4% annually for those who stayed in their jobs, but job switchers experienced a notable increase in pay of 7%, the highest since August 2025.
ADP chief economist Nela Richardson highlighted that the rapid pay growth among job-changers suggests supply constraints in certain labor market segments and noted that hiring patterns are evolving in response to changing economic conditions.
This report precedes the Bureau of Labor Statistics' official nonfarm payrolls report, which is anticipated to show an increase of 83,000 hires for July, up from June's 57,000, with the unemployment rate expected to remain at 4.2%. The current labor market dynamics may influence the Federal Reserve's decisions regarding interest rates, especially as inflation concerns persist