ADP Report: Private Payroll Growth Slows in July, Falling Short of Expectations at 122,000

Private Payroll Growth Slowed to 122,000 in July, Less Than Expected, ADP Says

The latest report from ADP shows that private payroll growth fell short of expectations in July, with only 122,000 jobs added during the month. This figure is significantly lower than the 412,000 jobs that were added in June. The slowdown in job growth is a concerning trend as the economy continues its recovery from the impact of the COVID-19 pandemic.

According to the ADP report, small businesses saw the largest decline in job growth, adding only 50,000 jobs in July compared to 64,000 in June. Medium-sized businesses added 62,000 jobs, down from 155,000 the previous month, while large businesses added 10,000 jobs, a decrease from 193,000 in June. This divergence in job growth across business sizes suggests that the recovery may be unevenly distributed.

The service sector, which has been hit particularly hard by the pandemic, saw a slowdown in job growth in July, adding only 91,000 jobs compared to 318,000 in June. The leisure and hospitality sector, in particular, added only 38,000 jobs, a significant drop from the 253,000 added in June. This sector has struggled with ongoing challenges such as labor shortages and changing consumer behavior.

On the other hand, the goods-producing sector saw an increase in job growth in July, adding 31,000 jobs compared to 94,000 in June. The manufacturing industry added 10,000 jobs, down from 39,000 the previous month, while the construction industry added 22,000 jobs, an increase from 52,000 in June. This trend suggests that the goods-producing sector is faring better in the current economic environment.

The slowdown in private payroll growth in July raises concerns about the overall pace of the economic recovery. With the Delta variant causing a surge in COVID-19 cases and leading to renewed restrictions in some areas, the labor market may face continued challenges in the coming months. Policymakers and businesses alike will need to closely monitor the evolving situation and adjust their strategies accordingly to support continued economic growth.