Private Payrolls Jump 104K in July, Beating Forecasts and Boosting Consumer Confidence

Private Sector Payrolls Rebound: ADP Signals Labor Market Resilience

Private-sector hiring rebounded in July, with U.S. companies adding 104,000 jobs, according to the latest ADP National Employment Report released Wednesday. The stronger-than-expected data suggests the labor market remains solid despite headwinds from trade tensions and consumer demand concerns.

Leisure and Financial Sectors Show Strongest Job Growth

The July print reversed June’s downwardly revised loss of 23,000 jobs and came in well above the Dow Jones estimate of 64,000. Hiring was particularly strong in leisure and hospitality, which added 46,000 jobs—an encouraging sign of steady consumer demand. Financial activities followed with a gain of 28,000, while trade, transportation, and utilities added 18,000. Construction jobs rose by 15,000, showing resilience in cyclical sectors.

Small Business Hiring Slows While Mid and Large Firms Lead

While medium and large-sized businesses each added 46,000 jobs, small firms—those with fewer than 50 employees—contributed just 12,000. This underperformance in small business hiring could indicate ongoing pressure from wage costs and tighter credit conditions. In contrast, larger firms appear more insulated and are driving the bulk of current labor market gains.

Wage Growth Holds Steady but Sector Weakness Emerges

Wages rose at an annual rate of 4.4%, in line with recent readings and supportive of continued consumer spending. However, education and health services, typically reliable contributors to job creation, lost 38,000 jobs. This marks a notable drag on an otherwise solid report and raises questions about structural labor supply or funding challenges in the sector.

ADP Data Sets Expectations for Friday’s Nonfarm Payrolls Report

ADP’s report is viewed as a lead indicator for the official Bureau of Labor Statistics data due Friday. While the two often diverge, traders will be watching for confirmation of job growth near the ADP’s level. Economists expect the BLS to show a gain of 100,000 nonfarm jobs in July, with a slight uptick in unemployment to 4.2%.

Market Forecast: Bullish Labor Sentiment Supporting Consumer-Led Sectors

With private payrolls outperforming estimates and wage growth maintaining momentum, the near-term outlook for consumer-driven sectors remains bullish. Strong hiring in leisure and financial services suggests continued resilience in discretionary spending and credit demand. Barring a surprise in the upcoming BLS data, the labor market appears poised to support modest economic growth and limit downside risks for equities tied to domestic consumption.

More Information in our ADP National Employment Report.