Private Sector Hiring Rebounds in July, ADP Reports

U.S. private sector employment increased by 104,000 jobs in July, according to data released Wednesday by payroll processor ADP. This gain reversed a revised loss of 23,000 jobs in June and exceeded economists' forecasts, which had predicted an increase of 64,000 positions. The June figure was also revised upward from an initially reported loss of 33,000 jobs.

While hiring remains below last year's levels, the July results mark the strongest monthly performance since March and suggest the labor market continues to show resilience. ADP chief economist Nela Richardson stated, "Our hiring and pay data are broadly indicative of a healthy economy," and noted that employers appear more optimistic about continued consumer strength.

Job gains were led by the leisure and hospitality sector, which added 46,000 positions, followed by financial activities with 28,000, trade, transportation and utilities with 18,000, and construction with 15,000. Medium and large businesses each contributed 46,000 new jobs, while small businesses added 12,000. However, education and health services recorded a loss of 38,000 jobs.

Wages grew at an annual rate of 4.4% in July, consistent with recent trends. The ADP report precedes the official nonfarm payrolls data from the Bureau of Labor Statistics, which is due Friday. Economists surveyed by Dow Jones expect that report to show an increase of 100,000 jobs in July and a slight rise in the unemployment rate to 4.2%.