Job Growth Slows to 122,000 in July

Private job growth in the United States experienced a notable slowdown in July, with companies adding only 122,000 jobs, according to a report from payroll processing firm ADP. This figure marks the slowest growth since January and falls short of the revised 155,000 jobs added in June. Additionally, wage increases for employees who remained in their positions rose by just 4.8% year-over-year, the lowest rate since July 2021, indicating a potential cooling in the labor market. In a related development, the Labor Department's Bureau of Labor Statistics reported a modest increase in the employment cost index, which rose by 0.9% in the second quarter, below the 1.2% increase seen in the first quarter. This data may influence the Federal Reserve's decision-making, as it suggests that inflation pressures from labor costs remain subdued. Analysts speculate that these trends could lead the Fed to consider a rate cut during its upcoming meeting. Job growth was primarily driven by the trade, transportation, and utilities sectors, which added 61,000 jobs, followed by construction with 39,000. Other sectors, including leisure and hospitality, education, and health services, also saw gains, while professional and business services, information, and manufacturing reported losses. Geographically, the South led job gains with 55,000 new positions, contrasting with the Midwest's modest addition of 17,000 jobs. The ADP report precedes the Labor Department's nonfarm payrolls count, which is expected to show a job growth estimate of 185,000 for July, down from 206,000 in June, with the unemployment rate anticipated to remain steady at 4.1%.