WASHINGTON (REUTERS) - U.S. private job growth slowed sharply in July, pointing to a loss of momentum in the economy heading into the third quarter that could temper expectations of a September interest rate hike.

Other economic data on Wednesday showed a widening of the trade deficit in June as solid domestic demand in the second quarter and a strong dollar sucked in imports of food and automobiles.

"Job growth is strong, but it has moderated since the beginning of the year. Nonetheless, even at this slower pace of growth, the labor market is fast approaching full employment,"said Mark Zandi, chief economist at Moody's Analytics in Pennsylvania.

Private employers hired 185,000 workers last month, the ADP National Employment Report showed, well below economists'expectations for an increase of 215,000.

June's private payroll gains were revised down to 229,000 from the previously reported 237,000.

The report, which is jointly developed with Moody's Analytics, came ahead of the U.S. government's more comprehensive employment report on Friday. According to a Reuters survey of economists, nonfarm payrolls likely increased 223,000 last month, matching June's job gains.

Signs of a moderation in hiring and some stalling in wage growth could cast doubts on expectations that the Federal Reserve will raise rates in September. The U.S. central bank has kept its short-term interest rate near zero since December 2008.

U.S. stock index futures marginally pared gains after the data, while prices for U.S. Treasuries fell. The dollar edged up against a basket of currencies.

In a separate report, the Commerce Department said the trade deficit increased 7.1 per cent to US$43.8 billion (S$60.3 billion), which also reflected a second straight monthly drop in exports. May's trade gap was revised to US$40.9 billion from the previously reported US$41.9 billion.