Private-sector hiring slowed significantly in July, with most of the job growth coming from health care, payroll firm ADP reported Wednesday.
Non-farm payrolls, excluding government, rose to a seasonally adjusted 44,000 in the month, lower than the downwardly revised 95,000 in June and also below the Dow Jones consensus estimate of 75,000.
In net terms, all of the increase was due to the services sector, which increased by 47,000 jobs, while goods-producing companies decreased by 3,000 jobs.
Of these jobs, the education and health services sector employed 36,000 people, continuing a long-standing trend of leading industry employment growth. Financial activities increased by 10,000, professional and business services by 9,000, and other services by 6,000.
Trade, Transport and Public Works decreased by 8,000 jobs and Natural Resources and Mining by 6,000 jobs. Manufacturing increased by only 2,000 people, while construction increased by 1,000.
The distribution between firm sizes is relatively balanced, with firms with fewer than 50 employees contributing 23,000 new jobs.
Wage growth for those who continue to work remains stable at 4.4% per year. Meanwhile, the number of people changing jobs increased by 7%, the highest since August 2025.
“Job changers are highly sensitive to real-time economic conditions, and the rapid growth in their wages signals supply constraints in some parts of the labor market,” said Nella Richardson, chief economist at ADP. “Meanwhile, typical employment patterns are also changing as employers react to changing macroeconomic conditions.”
The monthly job growth was the slowest since January in a year of stabilization after the labor market showed little progress in 2025.
Most Fed officials have expressed confidence in the employment situation, keeping inflation concerns at the forefront. The Fed has kept its benchmark interest rate unchanged, but markets are betting that it will raise rates by the end of the year unless inflation data improves.
ADP’s report was released two days before the Bureau of Labor Statistics releases its official report on nonfarm payrolls for July.
Economists surveyed by Dow Jones expect the tally to bring payrolls to 83,000, up from 57,000 in June, and the unemployment rate to remain at 4.2%.
