In July, the U.S. ADP employment increased by 104,000, exceeding expectations, but still difficult to conceal the reality of a cooling labor market

According to the Zhitong Finance APP, the U.S. private sector job market showed unexpected growth in July, but there is a coexistence of structural differentiation and a trend of slowing labor demand. Data released by ADP Research on Wednesday indicated that U.S. ADP employment increased by 104,000 in July, the largest increase since March, while the market had expected an increase of 75,000. Although this data is better than market expectations, it does not mask the reality of a cooling overall labor market— the proportion of consumers who believe "jobs are hard to obtain" has risen to a nearly four-and-a-half-year high, echoing the trend of increasing initial jobless claims.

Industry differentiation became the most significant feature of the job market in July. The leisure and hospitality industry and the financial activities sector became the main recruitment forces, while the education and health services sector experienced layoffs for the fourth consecutive month. Specifically, the construction industry remained resilient, adding 15,000 jobs, an acceleration from June's 9,000; the manufacturing sector showed a clear cooling, with only 7,000 jobs added in July, far below June's 15,000; the trade, transportation, and utilities sectors performed actively, adding 18,000 jobs, up from June's 14,000; the financial services sector rebounded strongly, adding 28,000 positions, reversing the decline of 14,000 in June. In contrast, while the professional and business services sector improved from June's decline of 56,000, it only added 9,000 jobs in July, and the subsequent trend still needs observation.

ADP Chief Economist Nela Richardson pointed out in a statement that the current hiring and compensation data overall reflect a healthy economic state, and employers' confidence in consumer demand is strengthening. However, the hiring pace in the private sector remains far below last year's average level, and amid increasing uncertainty regarding Trump administration policies, companies are becoming more cautious in staffing. Although initial jobless claims remain low, the reemployment cycle for unemployed workers is extending, indicating a decrease in labor market mobility.

The market generally expects that the U.S. Department of Labor's non-farm payroll report for July, to be released on Friday Beijing time, will show an increase of 110,000 jobs, with the unemployment rate possibly rising from June's 4.1% to 4.2%. It is worth mentioning that most economists currently believe that in light of observing the impact of tariffs on inflation and the continued slowdown in the labor market, the Federal Reserve will maintain the benchmark interest rate in the range of 4.25%-4.50% at the conclusion of this week's monetary policy meeting.

Regarding wage growth, a report jointly released by ADP and the Stanford Digital Economy Lab shows that the salaries of retained employees increased by 4.4% year-on-year in July, while the salary increase for job switchers was 7%, with wage growth remaining stable over the past four months. The recovery of the service industry has become the main driver of job growth, but the education and health sectors have continued to experience a net loss of jobs this year. This ADP survey covers over 25 million U.S. private sector employees, and its data provides important references for observing labor market dynamics