Private payroll company ADP reported that US jobs grew the least since January of 2021 with 127,000 private payrolls in November. The addition of jobs was much lower than the consensus 200,000 and lower than October’s 239,000 new jobs. The tight labor market, rising interest rates and elevated inflation are the main catalysts for weakness. The slowdown in jobs was led by the manufacturing sector losing -100K jobs and interest rate-sensitive sectors including professional/business services (-77K); financial activities (-34K); information (-25K) and construction (-2K). The US Labor Department will report its jobs report on Friday.
ADP US November 2022 Employment Report
Job growth was concentrated in the services-providing sector which created 213K jobs, led by leisure/hospitality (224K); trade/transportation/utilities (62K); education/health (55K). according to ADP.
“The data suggest that Fed tightening is having an impact on job creation and pay gains. In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting, and the post-pandemic recovery is stabilizing”, said Nela Richardson, chief economist, ADP
Total U.S. Nonfarm Private Employment: 127,000
By Company Size
Small establishments: -51,000
o 1-19 employees 5,000
o 20-49 employees -56,000
Medium establishments: 90,000
o 50-249 employees 246,000
o 250-499 employees -37,000
Large establishments: -68,000
o 500+ employees -68,000
“Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains. In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing.”Nela Richardson Chief Economist, ADP
Change by Industry Sector
o Natural resources/mining 16,000
o Construction -2,000
o Manufacturing -100,000
o Trade/transportation/utilities 62,000
o Information -25,000
o Financial activities -34,000
o Professional/business services -77,000
o Education/health services 55,000
o Leisure/hospitality 224,000
o Other services 8,000
Pay gains moderated again in November
Pay growth remained elevated even as it continued a modest but broad-based deceleration. Job
changers notched their fifth straight slowdown and the smallest increase in pay since January. Pay
growth for job stayers edged down, too, led by leisure and hospitality, which had a rapid run-up in 2021
but has been falling since March.
Median Change in Annual Pay (ADP matched person sample)
The ADP count comes two days ahead of the government’s nonfarm payrolls report, which includes government jobs that ADP does not count.
The Fed Chair Powell came out with a more hawkish tone as expected at the last FOMC. Federal Reserve President Powell and other Fed Governors have admitted they are unsure of the path for wages and inflation. The wages data gives us indications of the FOMC plans on rates into 2022.
Estimates for BLS report
The Labor Department is set to release its November jobs report Friday at 8:30 a.m. ET. Here are the main metrics expected:
- Economists forecast the U.S. added jobs last month, down from
- Average hourly earnings gains are expected to hold at
- Headline unemployment rate is forecast to tick lower, to a multi-decade trough of around
About the ADP® National Employment Report™
The ADP® National Employment Report™ is a monthly measure of the change in total U.S. nonfarm private employment derived from actual, anonymous payroll data of client companies served by ADP®, a leading provider of human capital management solutions. The report, which measures nearly 26 million U.S. workers, is produced by the ADP Research Institute®, a specialized group within the company that provides insights around employment trends and workforce strategy, in collaboration with Moody’s Analytics, Inc.
Each month, ADP Research Institute issues the ADP National Employment Report as part of the company’s commitment to adding deeper insights into the U.S. labor market and providing businesses, governments and others with a source of credible and valuable information. The ADP National Employment Report is broadly distributed to the public each month, free of charge.
The data for this report is collected for pay periods that can be interpolated to include the week of the 12th of each month and processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of establishments. Due to this processing, this subset is modified to make it indicative of national employment levels; therefore, the resulting employment changes computed for the ADP National Employment Report are not representative of changes in ADP’s total base of U.S. business clients.
From The TradersCommunity News Desk