U.S. July ADP Employment - Some loss of momentum
ADP’s July estimate for private sector employment growth of 122k is below expectations and the slowest since January. ADP trend had picked up in early 2024 to become more consistent with non-farm payrolls, which it had been underperforming, but this data suggests the pick-up may be fading.
The ADP detail is mixed with most of the growth coming from a 61k rise in trade, transport and utilities, and a 39k increase in construction. Otherwise the detail is subdued. Education and health, which has been leading recent non-farm payroll gains, rose by only 22k, while leisure and hospitality, which led June’s 155k increase in the ADP report, rose by a moderate 24k.
Wage data showed a 4.8% rise in growth for job stayers, a three year low and down marginally from 4.9% in June, while job changers saw a significant slowing to 7.2% from 7.7%. This, like the headline, is consistent with a less tight labor market. We expect a 175k rise in July non-farm payrolls, but our private sector payroll forecast of 130k is not far from the ADP outcome.
