Private employment data indicates a tightening labor market despite slow job growth. Employers are cautious due to economic uncertainty, limiting hiring. However, worker shortages in certain sectors are increasing pay. This creates an uneven market where some industries compete for scarce labor. ADP's chief economist notes pockets of supply constraints are driving this. Job growth in July was only 44,000, the lowest this year. Conversely, pay for job switchers rose to a fast 7% annually. Construction saw minimal job gains but record pay increases for new hires. Education and health services added the most jobs, with elevated pay. Other data supports a more resilient labor market than headline figures suggest. Bank of America data shows accelerated payroll growth, especially for lower-income workers. After-tax wage growth for lower-income households surpassed higher earners for the first time in a while. This convergence indicates an upward trend and evidence of a tightening labor market. Persistent worker shortages are maintaining wage pressures in crucial industries. However, this pay growth alone may not trigger inflation.