In November, job creation in the private sector continued to slow, with payroll processing firm ADP reporting an addition of just 103,000 workers. This figure, slightly below the revised October count of 106,000 and missing the Dow Jones estimate of 128,000, reflects a trend of decelerating employment growth.
Despite the modest increase in jobs, there was a noteworthy development in wage growth. Annual pay showed a mere 5.6% increase, marking the smallest gain since September 2021. Interestingly, job-changers experienced an 8.3% wage increase, indicating that the premium for switching positions was at its lowest since ADP began tracking this data three years ago.
Regarding industry-specific dynamics, leisure and hospitality, which had been a leading force in job creation since the onset of the COVID-19 pandemic in early 2020; we recorded a loss of 7,000 jobs in November. On the other hand, trade, transportation, and utilities experienced an uptick of 55,000 positions, while education and health services added 44,000 jobs, and other services contributed 15,000.
Services-related industries were the primary source of job gains for the month, while goods-producing sectors saw a net loss of 14,000 jobs. This decline was attributed to reductions of 15,000 in manufacturing, despite the United Auto Workers strikes resolution, and 4,000 in construction. Surprisingly, recent layoffs in Silicon Valley and on Wall Street were not reflected in the data, as both sectors posted gains for the month.
ADP’s chief economist, Nela Richardson, highlighted the changing dynamics in the labor market, noting that the post-pandemic recovery boost from restaurants and hotels is diminishing. Richardson predicts a return to more moderate hiring and wage growth 2024 for the overall economy.
Companies with 50 to 499 employees contributing 68,000 jobs, while small businesses added just 6,000, led to Job creation. The ADP report precedes the more widely observed nonfarm payrolls count from the Labor Department by two days. It is important to note that the two reports can differ, though private payroll numbers were closely aligned in October.
When considering government jobs, nonfarm payrolls increased by 150,000 in October, and expectations for November suggest a growth of 190,000, according to Dow Jones. Additionally, the labor market showed signs of loosening as the Labor Department reported declining job openings to 8.73 million in October, the lowest level since March 2021.