Private employment growth stalled in July as the American private sector added 44,000 positions, substantially underperforming consensus forecasts of 75,000 new jobs. The figure represented a significant deceleration from June’s revised total of 95,000 and marked the slowest pace since January.
Education and health services accounted for 36,000 of the month’s total job gains, with the remaining 8,000 positions distributed across the broader economy. Employment in trade and transportation declined by 8,000 positions, while mining lost 6,000 jobs. Manufacturing expanded modestly with 2,000 new hires, construction added 1,000, and goods production contracted by 3,000. Small businesses with fewer than 50 employees drove the hiring that did occur, a pattern inconsistent with robust economic confidence.
Wage pressures remained a focal point despite weak hiring. Workers who remained in their existing positions received raises averaging 4.4%, while those who switched jobs achieved 7% increases, representing the largest premium since August 2025. The widening gap between job-stayer and job-switcher wage growth suggested tight labor supply in certain sectors, though analysts attributed broader hiring trends to employers adapting to changing macroeconomic conditions.
The data complicates the Federal Reserve’s policy deliberations. Officials have maintained that labor market conditions remain healthy while characterizing inflation as the primary concern. The benchmark interest rate has remained unchanged, with three officials dissenting on the hawkish side at the most recent meeting. Markets are currently pricing expectations for a rate increase by year-end.
Attention now shifts to Friday’s official jobs report from the Bureau of Labor Statistics, which is expected to show 83,000 new positions compared to June’s 57,000, with unemployment holding steady at 4.2%. Analysts cautioned against reading the ADP data as indicating strength in the employment picture.
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