U.S. Private sector job growth slows more than expected in July

By William Collins, consultant in stock markets – Eurasia Business News, August 5, 2026. Article no 3045

Times Square, Manhattan, New York City- Photo credit : Swann Collins

U.S. private sector job growth slowed more than expected in July 2026, signaling a softer labor market than economists had anticipated. The report suggests hiring momentum is cooling, which could reinforce expectations that the Federal Reserve may have more room to ease policy later this year.

U.S. private sector employment rose +44,000 in July, below the consensus of +75,000 and slowing from the +98,000 recorded in June, according to data released Wednesday by ADP. Most of the actual growth came from education and health services.

Among the report’s notable data, wage increases for workers who changed jobs reached their highest level in nearly a year.

Annual increases in compensation for those who remained in their current positions held steady at +4.4% in July. Those who joined a new job, however, saw their annual earnings rise 7.0% in July, up from 6.6% in June, the largest year-on-year increase since August 2025.

On net, all of the gains came from the services sector, which added 47,000 while goods-producing companies see a decline of 3,000.

Of those jobs, the education and health services sector produced 36,000, continuing a longstanding trend for the industry in leading employment growth. Financial activities added 10,000, professional and business services contributed 9,000 and the other services category saw a gain of 6,000.

Trade, transportation and utilities lost 8,000 while natural resources and mining was off 6,000. Manufacturing saw growth of just 2,000 while construction added 1,000.

Distribution among company size was relatively balanced, with firms employing fewer than 50 people leading with 23,000 new jobs.

Compensation costs for civilian workers increased 0.9 percent, seasonally adjusted, for the 3-month period ending in June 2026, the U.S. Bureau of Labor Statistics reported today. Wages and salaries increased 0.9 percent and benefit costs increased 1.0 percent from March 2026, reported the U.S. bureau of labor statistics.

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© Copyright 2026 – Eurasia Business News. Article no. 3044