By Xavier Fontdegloria

 

Hiring among U.S. employers slowed sharply in July, signaling that the full recovery of the labor market could be bumpy despite high economic growth.

The U.S. nonfarm private employment increased by 330,000 in July, data from ADP National Employment Report showed Wednesday, well below the 653,000 rise expected by economists polled by The Wall Street Journal.

In June, the U.S. private sector created 680,000 jobs, down from an initial estimate of 692,000.

"July payroll data reports a marked slowdown from the second quarter pace in jobs growth," said Nela Richardson, chief economist at ADP. The labor market recovery shows an uneven progress, she said.

Bottlenecks in hiring continue to hold back stronger gains in employment, particularly in light of concerns about the new Covid-19 Delta variant, Ms. Richardson said. Barriers that keep workers on the sidelines should ebb in the coming months, leading to stronger monthly job gains, she said.

Medium businesses, between 50 and 499 employees, added 132,000 jobs in July. Large businesses, those of at least 500 workers, created 106,000 jobs; and small businesses, with a maximum of 49 employees, registered 91,000 payroll gains.

By sector, 318,000 jobs were created among services providers. Among those, 139,000 were added in the leisure and hospitality sector, while education and health services gained 64,000 payrolls.

Jobs in the goods-producing sector were up by 12,000, with 8,000 in manufacturing, 3,000 in natural resources and mining, and 1,000 in construction, ADP said.

The report, carried out by the ADP Research Institute along with Moody's Analytics, is based on data through the 12th of the month.

The U.S. Department of Labor is expected to release its employment report for July, which covers the same period as the ADP National Employment Report, on Friday. Economists polled by The Wall Street Journal are expecting it to show nonfarm payrolls up by 845,000 for the month and the unemployment rate down to 5.7%. The ADP series can diverge considerably from the Labor Department's data on a monthly basis.

 

Write to Xavier Fontdegloria at xavier.fontdegloria@wsj.com

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(END) Dow Jones Newswires

August 04, 2021 08:51 ET (12:51 GMT)

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