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US companies add far fewer jobs than forecast, ADP data show

A help wanted sign at an arcade on the boardwalk in Ocean City, N.J.
A help wanted sign at an arcade on the boardwalk in Ocean City, N.J.Ted Shaffrey/Associated Press

US companies added far fewer jobs than expected in July, indicating persistent hiring obstacles despite broader improvement in the economy.

Businesses’ payrolls increased by 330,000 last month, the smallest gain since February, after a revised 680,000 gain in June, according to ADP Research Institute data released Wednesday. The figure fell short of all economists’ estimates in a Bloomberg survey. The median estimate was for a 690,000 rise.

The slowdown in hiring underscores the challenges of a full labor market recovery. Firms are trying to keep pace with an unleashing of pent-up demand, but it will take time to fill a now-record number of open positions.


The ADP data showed a broad moderation in employment growth. While the report and government data don’t always move in lock-step, the smaller advance could temper expectations for an outsize gain in official payrolls figures on Friday. The hiring deceleration was acute in leisure and hospitality, an industry that has the longest road to recovery.

The yield on the 10-year Treasury note declined after the figures, falling as low as 1.13 percent.

Service-provider employment increased 318,000 in July. Payrolls at leisure and hospitality businesses rose 139,000 during the month, also the smallest advance since February.

Payrolls at goods producers rose by 12,000. Employment at construction firms increased by just 1,000 in July.

‘’July payroll data reports a marked slowdown from the second quarter pace in jobs growth,’’ Nela Richardson, ADP’s chief economist, said in a statement. ‘’Bottlenecks in hiring continue to hold back stronger gains, particularly in light of new covid-19 concerns tied to viral variants.’’

The figures come just before the government’s monthly jobs report, and economists expect private payrolls to jump 718,000 in July. The unemployment rate is projected to fall to 5.7 percent as participation improves.

ADP’s payroll data represent firms employing nearly 26 million workers in the United States.