U.S. employers added fewer-than-expected jobs into the economy last month, according to a private sector reading from payroll services provider ADP, suggesting an uneven recovery as pandemic concerns and supply chain disruptions hold back labor market gains.
Payroll processing group ADP said in its National Employment Report, which it compiles with Moody's Analytics, that private sector jobs grew by 330,000 last month, the lowest since the March re-opening and notably of the Street consensus forecast of a 695,000. The final reading for June was revised lower by 12,000 positions to 680,000.
“The labor market recovery continues to exhibit uneven progress, but progress nonetheless. July payroll data reports a marked slowdown from the second quarter pace in jobs growth,” said ADP's chief economist Nela Richardson. “For the fifth straight month the leisure and hospitality sector is the fastest growing industry, though gains have softened. The slowdown in the recovery has also impacted companies of all sizes."
"Bottlenecks in hiring continue to hold back stronger gains, particularly in light of new COVID-19 concerns tied to viral variants," she added. "These barriers should ebb in coming months, with stronger monthly gains ahead as a result."
The Bureau of Labor Statistics will publish its official July nonfarm payroll report Friday, with economists looking for a headline total that represents around 880,000 new jobs, following on from June's better-than-expected 850,000 tally.
U.S. equity futures were modestly lower following the data release, with contracts tied to the Dow Jones Industrial Average indicating an opening bell decline of 120 points and those linked to the S&P 500 priced for an 11 point dip from last night's record close.
Benchmark 10-year Treasury bond yields, meanwhile, ticked lower, to 1.141%, while the dollar index slipped 0.1% against a basket of its global peers to trade at 92.021.