U.S. Private Sector Adds 122,000 Jobs In July, Wage Growth Slows

(RTTNews) - Private sector employment in the U.S. increased by less than expected in the month of July, according to a report released by payroll processor ADP on Wednesday.

ADP said private sector employment climbed by 122,000 jobs in July after jumping by an upwardly revised 155,000 jobs in June.

Economists had expected private sector employment to increase by 150,000 jobs, matching the job growth originally reported for the previous month.

The report said employment in service-providing sector rose by 85,000 jobs in July, with a notable increase in employment in the trade/transportation/utilities sector partly offset by decreases in employment in the professional/business services and information sectors.

Employment in the goods-producing sector also climbed by 37,000 jobs, as job growth in construction sector more than offset a dip in manufacturing jobs.

ADP also said the year-over-year pay gains for job-stayers slowed to 4.8 percent in July, the slowest pace of growth in three years.

Job-changers also saw a big drop in year-over-year pay growth, which slowed to 7.2 percent in July from 7.7 percent in June.

"With wage growth abating, the labor market is playing along with the Federal Reserve's effort to slow inflation," said ADP chief economist Nela Richardson. "If inflation goes back up, it won't be because of labor."

On Friday, the Labor Department is scheduled to release its more closely watched report on employment in the month of July, which includes both public and private sector jobs.

Employment is expected to increase by 175,000 jobs in July after surging by 206,000 jobs in June, while the unemployment rate is expected to remain unchanged at 4.1 percent.