U.S. private payrolls growth slows as labor shortages linger

WASHINGTON, Aug 4 (Reuters) - U.S. private payrolls increased far less than expected in July as shortages of workers and raw materials constrained hiring in the manufacturing and construction industries.

The fewest job gains in five months shown in the ADP National Employment Report on Wednesday suggested some downside risk to economists' expectations for another month of solid payrolls growth when the government publishes its more comprehensive, and closely watched employment report for July on Friday.

"It suggests that labor shortages are still acute," said Paul Ashworth, chief U.S. economist at Capital Economics in Toronto. "The ADP is not always a good predictor of the official nonfarm payroll employment figures but, for what it's worth, it suggests a clear downside risk to the consensus forecast."

Private payrolls rose by 330,000 jobs last month, less than half of the 695,000 that had been anticipated by a Reuters survey of economists. Data for June was revised down to show 680,000 jobs added instead of the initially reported 692,000. The ADP report is jointly developed with Moody's Analytics