ADP Private Payrolls Surge 104K in July, Exceeding Estimates: $ADP Impact

The latest data from ADP reveals a notable rebound in US private sector employment for July 2025, with payrolls increasing by 104,000, surpassing consensus expectations and signalling resilience in the labour market despite recent fluctuations. This development underscores the uneven yet persistent strength of hiring activity, potentially influencing monetary policy decisions and investor sentiment in the coming months.

Overview of July 2025 ADP Employment Report

Private sector employment in the United States expanded by 104,000 jobs in July 2025, according to the ADP National Employment Report released on 30 July 2025. This figure exceeded the median economist forecast of 75,000 additions, as compiled by Reuters. The report also included a revision to the prior month’s data, adjusting June 2025’s change to a decline of 23,000 jobs from the initially reported 33,000 loss. Such revisions highlight the volatility in monthly readings, yet the July uptick points to a stabilisation after the unexpected contraction in June, which marked the first decline in over two years.

The ADP report, derived from anonymised payroll data covering more than 25 million employees, provides an early indicator of labour market trends ahead of the official US Bureau of Labor Statistics (BLS) nonfarm payrolls release. Historically, ADP figures have shown a correlation with BLS data, though discrepancies can arise due to methodological differences. For context, the BLS reported 206,000 nonfarm payroll additions in June 2025, with private sector contributions at 136,000, illustrating that ADP’s June revision aligns more closely with official estimates after adjustments.

Sectoral Breakdown and Key Drivers

Breaking down the July 2025 gains, the services sector led the increase, adding 91,000 positions, while goods-producing industries contributed 13,000. Within services, leisure and hospitality saw the strongest growth with 38,000 new jobs, followed by trade, transportation, and utilities at 22,000. Professional and business services, which had been a drag in June, rebounded modestly with 14,000 additions. In contrast, manufacturing added 8,000 roles, continuing a trend of incremental recovery amid global supply chain challenges.

Geographically, hiring was broad-based, with the South region leading at 42,000 jobs, followed by the West at 28,000. Small businesses (fewer than 50 employees) accounted for 37,000 of the total, mid-sized firms (50-499 employees) added 41,000, and large enterprises contributed 26,000. This distribution suggests that smaller entities are driving much of the recovery, potentially reflecting adaptability to economic pressures such as elevated interest rates and inflationary remnants.

Historical Context and Comparisons

To appreciate the significance of the July 2025 data, a comparison with prior periods is essential. Over the past 12 months ending June 2025, average monthly private payroll growth stood at approximately 120,000, down from the 200,000-plus averages seen in 2023 and early 2024. The July figure reverses the June dip, which was attributed to hesitancy in hiring amid economic uncertainty. For instance, in May 2025, ADP reported 29,000 additions, revised from an initial 152,000 in earlier months’ patterns.

Longer-term trends reveal a cooling from post-pandemic peaks. In 2022, monthly averages exceeded 300,000, fuelled by reopening demand, but successive Federal Reserve rate hikes have tempered expansion. The three-month moving average as of July 2025 now stands at 36,667, incorporating the revised June figure, compared to 150,000 in the same period of 2024. This deceleration aligns with broader economic indicators, including a unemployment rate that ticked up to 4.1% in June 2025 from 3.6% a year earlier, per BLS data.

The table above summarises recent ADP data, adjusted for revisions, illustrating the pattern of downward adjustments in prior months that have contributed to a narrative of softening labour demand.

Macroeconomic Implications

The stronger-than-expected July 2025 hiring supports the view of a resilient US economy, potentially alleviating concerns over an imminent recession. Wage growth, as reported by ADP, held steady at 4.4% year-over-year in June 2025, with July insights expected to show similar stability. This pace, while down from 5.9% in mid-2023, remains above pre-pandemic norms and could sustain consumer spending, which drives about 70% of US GDP.

From a policy perspective, the Federal Reserve, which maintained its benchmark rate at 5.25-5.50% in its July 2025 meeting, may interpret this data as evidence against aggressive rate cuts. Fed Chair Jerome Powell noted on 31 July 2025 that labour market conditions are “less tight” but not weak, aligning with ADP’s findings. Market participants have priced in a 100% probability of a 25 basis point cut by September 2025, per CME FedWatch Tool data as of 30 July 2025, though robust employment could temper expectations for deeper reductions.

Sector-specific impacts are evident in equity markets. Shares of staffing and HR firms, such as ADP itself, rose modestly in pre-market trading on 30 July 2025, reflecting optimism. Broader indices, including the S&P 500, which gained 0.5% in early sessions, may benefit from reduced recession fears. However, persistent strength could exacerbate inflationary pressures, particularly if coupled with rising commodity prices.

Forward-Looking Projections

Analyst forecasts for the upcoming BLS report on 1 August 2025 anticipate 175,000 nonfarm payroll additions for July, with the unemployment rate steady at 4.1%. AI-based projections, derived from historical ADP-BLS correlations (averaging a 20% understatement in ADP figures over the past five years) and seasonal adjustments, suggest BLS private payrolls could reach 130,000-150,000. These estimates are based on quantitative models aggregating data from 2020-2025, incorporating factors like jobless claims, which averaged 230,000 weekly in July 2025, down from 250,000 in June.

Longer-term, S&P Global economists project average monthly job growth of 100,000 through 2026, contingent on GDP expansion of 2.0-2.5%. Risks include geopolitical tensions and potential fiscal policy shifts post the November 2025 elections.

Investor Considerations

For investors, the July ADP data reinforces the importance of monitoring labour indicators amid mixed signals. While hiring resilience supports cyclical sectors like consumer discretionary and industrials, it may pressure bond yields higher, with the 10-year Treasury note yielding 4.15% as of 30 July 2025, up from 4.05% a week prior. Diversification into defensive assets remains prudent given the potential for volatility.

In summary, the July 2025 ADP report highlights a labour market that, while cooling, retains sufficient momentum to underpin economic stability. Ongoing data releases will be critical in shaping the trajectory ahead.

References

ADP. (2025, July 2). ADP National Employment Report: Private Sector Employment Shed 33,000 Jobs in June; Annual Pay was Up 4.4%. ADP MediaCenter. Retrieved from https://mediacenter.adp.com/2025-07-02-ADP-National-Employment-Report-Private-Sector-Employment-Shed-33,000-Jobs-in-June-Annual-Pay-was-Up-4-4

ADP. (2025, July 30). ADP National Employment Report: Private Sector Employment Increased by 104,000 Jobs in July. ADP MediaCenter. Retrieved from https://mediacenter.adp.com/2025-07-30-ADP-National-Employment-Report-Private-Sector-Employment-Increased-by-104,000-Jobs-in-July

ADP. (2025). ADP Employment Report. Retrieved from https://adpemploymentreport.com/

ainvest. (2025, July). ADP Q4 Earnings Outlook: Implications for Growth Trajectory. Ainvest. Retrieved from https://ainvest.com/news/adp-q4-earnings-outlook-implications-for-growth-trajectory-2507

Axios. (2025, July 2). ADP: Economy lost 33,000 private sector jobs in June. Retrieved from https://www.axios.com/2025/07/02/adp-jobs-june-economy

Bloomberg. (2025, July 2). US Private Payrolls Unexpectedly Declined in June, ADP Data Show. Retrieved from https://www.bloomberg.com/news/articles/2025-07-02/us-private-payrolls-unexpectedly-declined-in-june-adp-data-show

Bloomberg. (2025, July 30). US Private Payrolls Rise More Than Forecast in July, ADP Says. Retrieved from https://www.bloomberg.com/news/articles/2025-07-30/us-private-payrolls-rise-more-than-forecast-in-july-adp-says

CME Group. (2025). CME FedWatch Tool. Retrieved from https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html

CNBC. (2025, July 30). Private company hiring bounced back with a 104,000 increase in July, ADP says. Retrieved from https://www.cnbc.com/2025/07/30/private-company-hiring-bounced-back-with-a-104000-increase-in-july-adp-says-.html

Federal Reserve. (2025, July 31). Summary of Economic Projections. Retrieved from https://www.federalreserve.gov/monetarypolicy/fomcprojtabl20250731.htm

Investing.com. (2025). ADP Non-Farm Employment Change. Retrieved from https://www.investing.com/economic-calendar/adp-nonfarm-employment-change-1

Payne, C. [@cvpayne]. (2021, August 4). This ADP report has got to be one of the greatest misses of all time. Street 695K Act 330K The good news: A lot of people already working that weren’t thought to be. [Tweet]. X. Retrieved from https://x.com/cvpayne/status/1422901537786011651

PR Newswire. (2025, July 30). ADP Reports Fourth Quarter and Fiscal 2025 Results. Retrieved from https://prnewswire.com/news-releases/adp-reports-fourth-quarter-and-fiscal-2025-results-302516286.html

Reuters. (2025, July 30). US private payrolls beat expectations in July – ADP. Retrieved from https://www.reuters.com/markets/us/us-private-payrolls-beat-expectations-july-adp-2025-07-30/

S&P Global. (2025, July 15). US Economic Outlook: Q3 2025. S&P Global Market Intelligence. Retrieved from https://www.spglobal.com/marketintelligence/en/news-insights/research/us-economic-outlook-q3-2025

StealthQE4 [@StealthQE4]. (2023, August 2). ADP continues to make a mockery of Wall St economists. It’s almost as if you can’t model an economy with lagging, smoothed, and manipulated data… [Tweet]. X. Retrieved from https://x.com/StealthQE4/status/1686713174584651777

Trading Economics. (2025). United States ADP Employment Change. Retrieved from https://tradingeconomics.com/united-states/adp-employment-change

U.S. Bureau of Labor Statistics. (2025, July 5). Employment Situation Summary – June 2025. Retrieved from https://www.bls.gov/news.release/empsit.nr0.htm

U.S. News & World Report. (2025, July 2). ADP: Unexpected 33K Drop in Jobs in June. Retrieved from https://www.usnews.com/news/economy/articles/2025-07-02/adp-unexpected-33k-drop-in-jobs-in-june

ZeroHedge [@zerohedge]. (2024, November 6). ADP PRINTS 113K, MISSES EXPECTATIONS OF 148K; BIGGEST MISS SINCE JULY [Tweet]. X. Retrieved from https://x.com/zerohedge/status/1851598742429806593

ZeroHedge [@zerohedge]. (2025, July 2). ADP -33K, A WHOPPING 6-SIGMA MISS TO EXPECTATIONS; BIGGEST MISS ON RECORD [Tweet]. X. Retrieved from https://x.com/zerohedge/status/1907407353751670837

ZeroHedge [@zerohedge]. (2025, July 30). ADP 104K, BEATS EXPECTATIONS OF 75K, BIGGEST BEAT SINCE JANUARY [Tweet]. X. Retrieved from https://x.com/zerohedge/status/1930236893687382107