The CME Group’s FedWatch, a gauge of financial markets’ expectations towards upcoming Federal Reserve decisions, now sees chances of a September cut as high as 95.4%.
Job gains were uneven across industries and regions. Leisure and hospitality added 50,000 jobs, while construction also performed well with a gain of 16,000 positions. However, manufacturing and trade, transportation, and utilities sectors both posted job losses, at -7,000 and -17,000 respectively.
Regionally, the Northeast and Midwest saw the largest increases, with 15,000 and 14,000 jobs added, while the South and West posted more modest gains.
Small businesses added 12,000 jobs, medium-sized firms 25,000, and large employers 18,000. Pay growth remained little changed from previous months, with job-stayers in financial activities seeing the highest median annual pay increase at 5.1%. In contrast, employees at the smallest firms (1-19 workers) saw the lowest pay growth at 2.5%.
Labor market signals remain mixed
The latest ADP report adds to a growing body of evidence suggesting the US labor market is losing steam. According to the latest Job Openings and Labor Turnover Survey (JOLTS) from the US Bureau of Labor Statistics, job openings fell to around 7.2 million in July, the lowest level since September 2024. Job openings have decreased by more than 300,000 over the past two months. Economists have noted that while layoffs remain low, hiring has slowed and wage growth is moderating, raising concerns about the sustainability of recent labor market gain.