- Private firms added only 127,000 jobs in the month, which is a significant drop from the 239,000 posted in October, and far less than the estimate of 190,000.
- The hospitality and leisure industries experienced increases of 24,000 however this was offset by the loss in professional and manufacturing professional services as well as financial and information services.
Private hiring was down dramatically in November, indicating that the labor market that has been historically tight may be slipping as per an update released on Wednesday by ADP, a payroll processing company. ADP.
Companies added only 127,000 positions in the month, which is a significant drop of 239,000 it announced for October and still well under what the Dow Jones estimate for 190,000. It was also the lowest figure since January.
The relatively low number is amidst Federal Reserve efforts to loosen up the employment picture that has around two jobs open for every single worker. Central bank officials have increased its standard borrowing rate by six occasions in the past year yet the unemployment rate remains 3.7 percent, close to the lowest rate since 1969.
“Turning points aren’t easy to track in the labor market, however, our results suggest there is evidence that Federal Reserve tightening is having an impact on job growth and wage increases,” said ADP chief economist Nela Richardson. “In In addition, employers are no longer in a hyper-replacement mode. There are fewer people quitting, and post-pandemic recovery is becoming more stable.”
The ADP report is due just two days before the Labor Department releases its more closely-watched nonfarm payrolls report. According to the economists interviewed by Dow Jones expect the report to show an increase of 200,000, following an uptick of 26,000 in the month of October.
The ADP Report, the top sector that saw the most growth was hospitality and leisure which experienced an increase of 224,000.
However, this was offset by the loss in the manufacturing sector (-100,000) as well as professional and professional services (-77,000) and finances (-34,000) along with information service (-25,000). The overall industry of goods-producing experienced a drop of 86,000 positions, while service firms added 213,000 net.
Despite the weak job numbers, wages continued to rise.
Pay grew 7.6 percent from the previous year, ADP said, though this was a little slower rate than the 7.7 percent reported in October.
In terms of size, the entire jobs created came from firms that employ between 50 and 499 employees This sector created 246,000 jobs. Small firms lost 51,000, while larger companies shed 68,000.