US hiring slows, but wage growth is speeding up

America's job market is sending about as many mixed signals as a Hinge date who says they had a great time...then leaves your last text on read.

Private US employers added just 44,000 jobs in July, the weakest monthly gain since January, according to ADP’s monthly report.

At the same time, workers who switched jobs saw their pay jump 7% year-over-year, the fastest increase in nearly a year, compared to 4.4% for workers who stayed put

Why the disconnect?

It’s a classic case of supply and demand. Hiring is slowing in industries like manufacturing and retail, where employers are dealing with tariffs, geopolitical uncertainty, and weaker consumer demand. But in industries where business is consistent and skilled workers are harder to find, wage growth is accelerating as competition for talent heats up.

Construction is a good example: The industry added just 1,000 jobs in July, but pay for workers who switched jobs reached a record high, reflecting strong demand tied to AI data center projects and a limited supply of experienced construction workers.

• Education and health services added a relatively muted 36,000 jobs in July, but also saw strong wage growth as employers continued competing for a limited pool of nurses, caregivers, and other skilled workers.

Other data tells a similar story. Bank of America found the number of paid workers in the US rose 2% year-over-year in July, with after-tax wage growth among lower-income households (+5.2% YoY) outpacing higher-income households (+4.2%) for the first time since late 2024.