The US labor market just sent a pretty uncomfortable signal. ADP’s July National Employment Report showed private-sector payrolls grew by just 44,000 last month, well below the 68,000 to 70,000 jobs economists had penciled in. June’s figure came in at 95,000 after a downward revision. July’s number represents the lowest monthly gain in six months.

What the numbers actually say

The services sector did the heavy lifting in July, adding 47,000 jobs. Goods-producing industries, which covers manufacturing and construction, shed 3,000 positions.

The preliminary NER Pulse showed an average of just 16,500 jobs added per week over the four weeks ending July 4.

The ADP report is produced in collaboration with the Stanford Digital Economy Lab and draws on anonymized payroll data from more than 25 million US workers.

Why crypto traders are watching a jobs report

The Federal Reserve has been holding rates at elevated levels while watching for signs that the labor market is cooling enough to justify cuts. When hiring slows, wage pressure eases, and the inflation picture gets friendlier. Bitcoin and the broader crypto market have historically responded well to environments where the cost of capital is falling and liquidity is expanding.

What investors should watch next

The ADP number is the appetizer. The main course arrives with the Bureau of Labor Statistics nonfarm payrolls report, which covers both private and government employment and tends to carry more weight in official policy discussions.

Watch services employment in particular. The July ADP data showed services as the only thing keeping the headline positive, but 47,000 jobs across the entire US services sector is not a robust number.