Private payrolls in the US increased by 146,000 in November, based on ADP, less than what was expected. This is evidence that the growth of the labor market is slowing down. The monthly job gain was lower than the downwardly revised increase of 184,000 in October and also lower than the Dow Jones estimate that had forecast a gain of 163,000.
Education and health services are the fastest growing, generating 50,000 new jobs. New jobs came into the books with construction generating 30,000 jobs while the trade, transportation, and utilities sectors contributed 28,000 new jobs. A rather massive “other services” contributed 20,000 new jobs.
In the opposite direction, however, manufacturing contracted by 26,000 jobs, and businesses employing less than 50 persons had their positions decline by 17,000.
In terms of wages, growth accelerated in November, rising by 4.8% year-over-year, marking the first acceleration in wage gains in 25 months. This increase represents a stronger pace of wage growth compared to October, signaling continued pressure on employers to attract and retain workers.
Nevertheless, the ADP report signaled mixed performance on the sectors part. According to Nela Richardson, ADP chief economist, overall job growth in the country still remained to be healthy although some particular sectors such as manufacturing financial services, leisure and hospitality sectors are lagging already, and manufacturing most significantly marked its biggest fall since the spring.
The ADP report does show significance, but relatively it is not as significant as the BLS report will be released on Friday, showing that nonfarm payroll should be higher by 214,000 in November due to an unusually low increase just last month by only 12,000 because the Boeing strike and other circumstances related to bad weather occurring in the Southeast.
This latest data continues to feed into concerns of a cooling labor market but also continues to show some positive job growth in some sectors, as well as upward pressure on wages. The next BLS report will provide more detail on the larger employment picture.
