The ADP National Employment Report for July showed that private sector employment increased by 122,000, below expectations of 147,000, signaling a possible slowdown in job growth.

Industry Employment Changes

Goods-producing industries added 37,000 jobs, including 39,000 in construction and 4,000 in manufacturing. Service-providing industries contributed 85,000 jobs, with the trade/transportation/utilities sector showing the strongest growth, adding 61,000 jobs. The Professional/Business Services sector, on the other hand, lost 37,000 jobs.

Regional Employment Trends

Regionally, the South led the rest of the region by adding 55,000 jobs. It was followed by the West, which added 32,000 jobs, the Northeast, which added 21,000 jobs, and the Midwest, which added 17,000 jobs. The South and Mid-Atlantic regions saw the most significant growth.

Employment by Business Size

Large firms (500+ employees) added 62,000 jobs, medium-sized firms (50-499 employees) added 70,000 jobs, and small firms (1-49 employees) lost 7,000 jobs, with the most significant declines occurring in small firms with 20-49 employees.

Salary Insights

Annual salary growth for retained employees slowed to 4.8%, the lowest level in three years. Salary growth for job changers declined from 7.7% to 7.2%. This trend is consistent with the Federal Reserve's efforts to curb inflation.

Industry Pay Changes

Among goods-producing industries, construction workers had the highest pay growth at 5.3 percent. Among service-providing industries, payroll growth was highest in the education/health services sector at 5.2 percent, followed closely by financial activities and other services at 5.0 percent each.

Salary Changes by Business Size

Medium-sized businesses (50-249 employees) provided the highest salary growth at 5.0%, while small businesses (1-19 employees) had the lowest salary growth at 4.1%.

Expert Comment.

ADP Chief Economist Nela Richardson noted that the slowdown in wage growth is consistent with the Fed's inflation control efforts. She said that if inflation rises again, it is unlikely to be caused by labor market pressures.

This report provides valuable insight into the U.S. private sector labor market, showing a slowdown in job growth and wage growth. These trends may influence future monetary policy decisions and economic forecasts.