Private sector jobs increased by 324,000 in July, and annual pay was up 6.2% year over year, according to the July ADP National Employment Report produced by the ADP Research Institute in collaboration with the Stanford Digital Economy Lab.
The financial activities sector saw a drop of 5,000 jobs in that same period. Leisure and hospitality continue to be the major growth drivers. One weakness was manufacturing, an interest rate-sensitive industry that shed jobs for the fifth straight month.
"The economy is doing better than expected and a healthy labor market continues to support household spending," said Nela Richardson, chief economist, ADP. "We continue to see a slowdown in pay growth without broad-based job loss."
Pay growth continued a downward trend in July. Job stayers saw a year-over-year pay increase of 6.2%, the slowest pace of gains since Nov. 2021. For job changers, pay growth slowed to 10.2%.
The Northeast region of the U.S. saw the most jobs gained at 276,000. The South saw a significant drop of 144,000 jobs. The South Atlantic area was hardest hit with a decline of 87,000 jobs.
The jobs report and pay insights use ADP's anonymized and aggregated payroll data to provide a representative picture of the private-sector labor market. The report details the current month's total private employment change, and weekly job data from the previous month. Because the underlying ADP payroll databases are continuously updated, the report provides a high-frequency, near real-time measure of U.S. employment. This measure reflects the number of employees on ADP client payrolls (payroll employment) to provide a richer understanding of the labor market. ADP's pay measure uniquely captures the earnings of a cohort of almost 10 million employees over a 12-month period.
The ADP National Employment Report is an independent measure and high-frequency view of the private-sector labor market based on actual, anonymized payroll data of more than 25 million U.S. employees.
