U.S. private payrolls add 44,000

ADP said on August 5 that U.S. private employers added 44,000 jobs in July, the smallest monthly gain of 2026 and well below economists’ expectations. The payroll processor revised June’s gain down to 95,000 from 102,000, and said annual pay growth for job-stayers was 4.4%. A separate Labor Department report on August 6 showed initial claims for unemployment benefits rose to 199,000 in the week ended August 1. Challenger, Gray & Christmas said U.S. employers announced 33,429 job cuts in July, the lowest monthly total in two years. ### Why did the ADP number get so much attention? The 44,000 increase stood out because it was far below the roughly 75,000 expected by economists surveyed ahead of the release and below June’s revised 95,000 gain. ADP said the July total was the weakest monthly reading this year. ADP chief economist Nela Richardson said employers “have grown more cautious in their hiring and more selective in their replacements.” The company said health care accounted for nearly all of July’s net job growth, while several other sectors were little changed or weaker. (mediacenter.adp.com) (finance.yahoo.com) ### If hiring slowed that much, are layoffs rising too? The Labor Department said first-time claims for state unemployment benefits increased by 1,000 to a seasonally adjusted 199,000 for the week ended August 1. Economists polled by Reuters had expected 202,000 claims. (mediacenter.adp.com) Challenger, Gray & Christmas reported that announced job cuts fell 27% from June and 46% from a year earlier. The firm said July’s 33,429 planned layoffs were the lowest monthly total since July 2024. Andy Challenger, the firm’s workplace expert and chief revenue officer, said in the report that “the pace of layoffs fell dramatically this summer.” Challenger also said announced hiring plans rose to 16,095, the highest July total since 2022. (money.usnews.com) ### What do these reports measure differently? (challengergray.com) ADP’s report tracks private payroll employment using anonymized payroll data covering more than 26 million workers and excludes government jobs. The Labor Department’s weekly claims report measures new filings for unemployment benefits, which economists use as a near real-time gauge of layoffs. Challenger’s monthly report counts publicly announced job cuts and hiring plans. (finance.yahoo.com) Those differences help explain why the signals can diverge in the same week. A low claims count and reduced layoff announcements can coexist with soft hiring if companies are holding on to current staff while slowing recruitment and replacement. That reading was reflected in Richardson’s description of more selective hiring. (mediacenter.adp.com) ### Which details inside the layoffs report mattered most? Challenger said artificial intelligence was the leading reason cited for job cuts for a fifth straight month, accounting for 10,970 announced reductions in July. The firm also said employers had announced 477,033 job cuts in the first seven months of 2026, down 41% from the same period in 2025. (mediacenter.adp.com) July’s lower layoff total does not erase the broader restructuring underway at some companies, but the Challenger data showed fewer employers announcing cuts last month than earlier in the summer. Reuters described that pattern as consistent with a stable labor market. (challengergray.com) ### What comes next for the labor-market picture? The Bureau of Labor Statistics has scheduled the July Employment Situation report for Friday, August 7, 2026, at 8:30 a.m. Eastern Time. That report will include total nonfarm payrolls, the unemployment rate and revisions to prior months, and will provide the next broad reading on whether the weakness in ADP’s July figure shows up in the government data. (bls.gov) (money.usnews.com)