For the second month in a row, ADP’s report on private sector hiring in the US blew away expectations.

Private sector employers added 324,000 new jobs in July, according to the update, released on Wednesday.

At 190,000, consensus was nowhere close. The highest estimate from more than two-dozen sad economists who spent the first week of August forecasting ADP instead of cooking on a beach somewhere in the rotisserie we’re still calling “Earth,” was 280,000.

Last month’s wild overshoot (the 497,000 print) was revised lower, but not by that much. It stands at 455,000.

So, according to ADP’s figures, US private sector hiring ran at an average of 390,000 so far this summer. That’s nice, but not exactly consistent with the labor market “softening” the Fed expects to see on the way to price stability.

“The economy is doing better than expected and a healthy labor market continues to support household spending,” ADP chief economist Nela Richardson remarked, underscoring the key pillar of the “no landing” macro narrative du jour.

The breakdown by firm size showed hiring was entirely concentrated in businesses with 249 or fewer employees. Firms with 250 or more workers shed 81,000 jobs.

By industry, manufacturing was the clear laggard. Again. Factories shed another 36,000 jobs in July. It was the fifth straight month of factory job losses in the ADP report. The total over that stretch comes to 198,000.

Earlier this week, the employment gauge in the ISM manufacturing survey dropped to the lowest in three years.

Leisure and hospitality led gains on the services side with more than 200,000 new jobs. Besides manufacturing, the only other occupation to show a decline was financial activities.

As for wages, there was more good news. Pay growth for so-called “job stayers” receded to 6.2%, the slowest YoY pace since November of 2021, but still more than healthy.

For “job changers,” the figure was 10.2%. That narrowed the reward for jumping ship to 4pp, the least in 26 months.

JOLTS data released on Tuesday showed the quit rate moderated in June, when overall quits fell back below four million. The less churn the better if you’re the Fed.

Even as she (perhaps accidentally) talked up the “no landing” scenario, Richardson nodded to a soft landing. “We continue to see a slowdown in pay growth without broad-based job loss,” she said Wednesday.

Notwithstanding the encouraging trend in wages (slower growth is good to the extent it removes the wage-price spiral tail risk, and with headline inflation receding, real wage growth is actually rising), markets were destined to trade the ADP headline as more evidence of an overheating labor market. As Richardson suggested, that’s an upside risk for consumption.

As ever (and with apologies to everyone who works hard to produce it) the ADP report will be a distant memory in the minds of traders by Friday afternoon if not corroborated by NFP.