US private-sector hiring slowed dramatically in July, with payroll processor ADP reporting a seasonally adjusted gain of only 44,000 jobs, far below economists' expectations of 75,000. The figure marks the weakest monthly increase since January and a sharp drop from June's revised 95,000.
Almost all new positions came from the services sector (+47,000), while goods-producing industries shed 3,000 jobs. Healthcare and education added 36,000, financial activities rose by 10,000, and professional/business services contributed 9,000. However, trade, transportation and utilities lost 8,000, natural resources/mining fell by 6,000, and construction added just 1,000.
Small businesses with fewer than 50 employees accounted for the largest share of hiring (23,000), but wage growth remained resilient. Job-stayers saw 4.4% annual pay gains, while job-changers enjoyed 7% wage growth, the fastest since August 2025. ADP Chief Economist Nela Richardson noted, "Job-changers are highly sensitive to real-time economic conditions, and their rapid pay growth implies supply constraints in parts of the labor market."
The ADP report followed a JOLTS release showing job openings fell by 178,000 to 7.359 million in June. ADP's high-frequency NER Pulse also signaled slower momentum, with a four-week moving average of just +15,000 jobs for mid-July. Median annual pay in the Pay Insights data was $62,100.
The weak hiring data heightens attention on the Federal Reserve, which has kept interest rates unchanged but faces pressure if inflation persists alongside softening employment. Markets now look to Friday's official BLS report, where economists forecast 83,000 nonfarm payrolls and an unchanged 4.2% unemployment rate.
