Hiring by U.S. companies slowed more than expected in July, pointing to a labor market that is continuing to cool in the face of higher interest rates, according to the ADP National Employment Report released Wednesday morning.

Companies added 122,000 jobs last month, missing the 150,000 gain that economists surveyed by Refinitiv predicted.

At the same time, the report showed that wage growth — a key driver of inflation — dropped slightly to 4.8%, the slowest pace of growth in three years. For workers who changed jobs, wages climbed 7.2%, down from the 7.7% increase recorded in June.

"With wage growth abating, the labor market is playing along with the Federal Reserve's effort to slow inflation," said Nela Richardson, ADP chief economist. "If inflation goes back up, it won't be because of labor."

This is a developing story. Please check back for updates.