US Private Payrolls Gain 44,000 Jobs in July Slowdown

US private companies added 44,000 jobs in July, marking the lowest monthly increase since the start of the year and falling significantly short of economist projections of 75,000. This slowdown follows a revised June increase of 95,000 and a May peak of 122,000. Despite the cooling hiring momentum, layoffs remain near record lows, creating a low-hire, low-fire economic environment.

Growth was concentrated in service-providing industries, particularly education, health services, and financial activities. Conversely, the leisure and hospitality sectors saw losses of 11,000 jobs, a decline potentially linked to the World Cup. Small firms accounted for more than half of the total payroll gains.

Wage growth for employees switching jobs accelerated to 7% year-over-year, the fastest pace since August 2025, while job-stayers saw a 4.4% increase. Nela Richardson, Chief Economist at ADP, attributed these shifting patterns to macroeconomic conditions and suggested hiring is unlikely to accelerate until inflation subsides and the conflict with Iran is resolved.

These trends emerge as the Federal Reserve System maintains current interest rates despite internal dissent from officials favoring hikes. Chairman Kevin Warsh has characterized the labor market as solid and steady, though he maintained a strict stance against persistently elevated inflation. The data precedes the official government employment report from the Bureau of Labor Statistics, expected Friday, which economists predict will show an increase of 98,000 jobs.