Private employers added more jobs than expected in July, rebounding after declining for the first time in more than two years during June.
On Wednesday, data from ADP showed private payrolls grew by 104,000 in July, above the 75,000 expected by economists and well above the 23,000 job cuts seen in June. Wednesday’s data showed June’s job cuts were revised lower to 23,000 from an initially reported 33,000.
Meanwhile, ADP’s Pay Insights data showed wages for job changers increased 7% over the prior year in July, unchanged from the prior month. Pay growth for workers who stayed at the same job increased 4.4% in July, down from 4.5% in June.
“We are in a labor market that has recalibrated to a lower average level,” ADP chief economist Nela Richardson told Yahoo Finance on a call with reporters. “The good news here is that that level is still solid enough to support the consumer, and that ultimately will be the tried and true test of the health of the labor market. Will consumers keep spending?”
The data comes just hours before the Federal Reserve will release its next monetary policy statement. The Federal Reserve is widely expected to hold interest rates steady. But at least one Federal Open Market Committee (FOMC) member has made the case to cut interest rates.
In a July 17 speech, Fed Governor Christopher Waller said he believes the Fed should be cutting interest rates at its July meeting as “private-sector payroll growth is near stall speed, and other data suggest that the downside risks to the labor market have increased.”
Read more: How the Fed rate decision affects your bank accounts, loans, credit cards, and investments
Other recent labor market data has also shown some signs of slowing. On Tuesday, new data from the Bureau of Labor Statistics showed 7.44 million jobs open at the end of June, a decrease from the 7.71 million seen the month prior. Meanwhile, the hiring rate ticked lower to 3.3% from 3.4% the month prior, sitting at its lowest level since November 2024.
These releases serve as an appetizer ahead of the week’s main economic event. On Friday, the July jobs report is expected to show 101,000 nonfarm payroll jobs were added to the US economy, with the unemployment rate inching higher to 4.2%, according to data from Bloomberg. In June, the US economy added 144,000 jobs, while the unemployment rate unexpectedly fell to 4.1%.
Josh Schafer is a reporter for Yahoo Finance. Follow him on X @_joshschafer.
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