US companies added 44,000 jobs in July, ADP data show

US companies added fewer jobs in July than expected, suggesting some cooling in hiring momentum after a recent stretch of solid gains.

Private payrolls rose 44,000 — the least since the start of the year — after a revised 95,000 increase in the prior month, according to ADP Research data out Wednesday. The July gain was smaller than all estimates in a Bloomberg survey of economists.

Even with the moderation in hiring, the report showed wage growth for those who switched jobs picked up to the strongest pace in nearly a year.

The figures point to a steady labour market supported by robust business and consumer demand. If confirmed in the government’s monthly jobs report on Friday, the recent employment trend suggests Federal Reserve officials can keep their focus on still-elevated inflation.

Fed Chairman Kevin Warsh called the job market “solid” and “steady” at his press conference last week after policymakers left rates unchanged. Three officials, however, voted in favour of raising rates.

Wage growth

The ADP report, published in collaboration with the Stanford Digital Economy Lab, also showed workers who changed jobs saw a 7% increase in pay from a year earlier. Wage growth for those who stayed put held at 4.4%. By industry, financial activities and manufacturing registered stronger wage gains.

“Job-changers are highly sensitive to real-time economic conditions, and their rapid pay growth implies supply constraints in parts of the labor market,” Nela Richardson, chief economist at ADP and a contributor to Bloomberg Television, said in a release.

The government’s employment report due Friday, which also includes public-sector hiring, is expected to show US employers added 80,000 jobs in July. That would be an improvement from June, when official data showed a moderation in hiring.

The ADP report showed companies added 36,000 jobs in education and health services but cut 11,000 positions in leisure and hospitality. More than half of the total gain in payrolls was at small firms.

ADP bases its findings on payrolls covering more than 26 million US private-sector employees.