The U.S. July ADP private sector employment report showed 44,000 new jobs added, sharply below the June revised figure of 95,000, indicating a clear weakening in private sector hiring momentum.
By broad category, the service sector added 47,000 jobs, while goods-producing industries shed 3,000 positions, further concentrating employment growth in the service industry. By subsector: the financial services industry added 10,000 jobs in July, down from 14,000 in June; professional/business services added 9,000, up from 2,000 previously; manufacturing added 2,000, down from 5,000; construction added 1,000, down from 2,000; and the trade, transportation, and utilities sector lost 8,000 jobs, compared to a gain of 15,000 in June, making it the main drag.
Wage trends showed a divergence: annualized salary growth for stayers held steady at 4.4%, not significantly declining despite the employment slowdown; while salaries for job switchers rose 7% year-over-year, the largest increase since August 2025, signaling tightness in the supply of skilled labor. Median annual wage growth by industry: financial services 5.2% (up from 5.1% in June), manufacturing 5.0% (up from 4.9%), construction 4.5% (down from 4.6%), professional/business services 4.1% (unchanged), and trade, transportation, and utilities at 4.4% (unchanged).
ADP Chief Economist Nela Richardson commented that job seekers are highly sensitive to the real-time economic environment, with rapid salary growth among job switchers reflecting supply constraints in some parts of the labor market; meanwhile, employers are changing traditional hiring patterns in response to macroeconomic shifts. Although ADP data often deviates from the nonfarm payrolls report, this sharp decline has heightened market concerns about a rapid cooling in the labor market. If Friday's nonfarm payrolls also weaken, markets will further lower expectations for the Federal Reserve's interest rate path, with Treasury yields potentially falling and the U.S. dollar likely under pressure, as the market awaits the nonfarm data to confirm whether the employment slowdown trend is established.
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