ADP: private hiring 44,000

ADP said on August 5 that U.S. private employers added 44,000 jobs in July, a sharp slowdown from 98,000 in June and the weakest monthly gain in the company’s latest run of reports. The reading arrived two days before the Labor Department’s July employment report, giving investors and policymakers another soft hiring signal to weigh. The Bureau of Labor Statistics, meanwhile, reported on August 4 that June job openings were little changed at 7.4 million, with hires steady at 5.3 million and layoffs and discharges unchanged at 1.8 million. Together, the releases showed a labor market that is cooling in some measures without a broad rise in separations. ### Why did the ADP number get so much attention? ADP’s 44,000 figure drew attention because it was far below June’s 98,000 increase and because the report tracks private payrolls using anonymized payroll data from more than 26 million U.S. workers. ADP describes the report as an independent, high-frequency view of the private-sector labor market produced with the Stanford Digital Economy Lab. (adpemploymentreport.com) July’s report matters partly because it landed just ahead of the government’s broader payrolls release, which covers both private employment and government jobs. The ADP measure does not always match the official count, but it is closely watched as an early read on hiring momentum. ### What did the broader labor data show? The Bureau of Labor Statistics said on August 4 that job openings in June were 7.4 million, with the openings rate at 4.4%. (adpemploymentreport.com) Hires were unchanged at 5.3 million, and total separations were little changed at 5.4 million. Within separations, quits held at 3.2 million and layoffs and discharges were unchanged at 1.8 million. Those figures showed fewer open positions than earlier in the cycle, but they did not show a sudden break in hiring or a surge in layoffs in June. BLS also said openings rose in transportation, warehousing and utilities and in federal government, while they fell in wholesale trade, nondurable goods manufacturing, and mining and logging. (bls.gov) ### How weak was the last official jobs report? The Labor Department said on July 2 that total nonfarm payroll employment increased by 57,000 in June and that the unemployment rate was 4.2%. BLS said employment continued to trend up in professional and business services, social assistance, and health care, while leisure and hospitality lost jobs. That June payroll gain provides the immediate baseline for Friday’s July report. (bls.gov) The official payroll measure differs from ADP’s private-employment estimate in coverage and methodology, but both releases are being read for signs of whether hiring is slowing further. ### What are economists watching next? Kiplinger listed “What to Expect From the July Jobs Report” in its August 5 archive, underscoring the focus on the Labor Department’s next release as markets look for a clearer read on hiring after the weak ADP figure and mixed JOLTS data. (bls.gov) The BLS release calendar shows the Employment Situation as the next major labor-market update. (adpemploymentreport.com) Friday’s report will provide the official July counts for nonfarm payrolls, private payrolls, unemployment and wage growth. Those figures, rather than the ADP estimate alone, will set the next benchmark for how economists and Federal Reserve officials describe the labor market in August. (bls.gov) (kiplinger.com)