US ADP employment growth decelerates in July

The ADP employment report for July showed private payroll growth of 185k on the month, below consensus expectations 215k and indicative of a deceleration in employment growth from the downwardly revised June reading of 229k. Goods-producing employers added a modest 8k jobs on the month previous-13k, and service sector job growth slowed to 178k, previous-216k. On an industry-specific level, construction added a solid 15k, previous-17k and manufacturing companies added just 2k, previous-9k.

This softness in manufacturing employment was broadly expected, given the weak survey readings on industry employment growth already available for July. Trade, transportation and utilities 25k, previous-47k and professional and business services 42k, previous-61k both reported slower paces of payroll growth on the month. Financial services added 10k, previous-16k to payrolls.

"Overall, we place limited weight on the ADP employment numbers given their history of frequent revisions. That said, the slower pace of private payroll growth reported for July by ADP is broadly in line with our outlook for 200k in nonfarm and private payroll growth in Friday's official employment", says Barclays.