ADP Employment Increase Is Modest in November
by:Tom Moeller
|in:Economy in Brief
Summary
- Job growth is sharply below Q3.
- Factory & construction jobs decline; service gain is modest.
- Pay gains slow.
The ADP National Employment Report indicated that nonfarm private sector payrolls increased 103,000 (2.0% Y/Y) during November following a 106,000 October gain, revised from 113,000. A 123,000 November gain had been expected in the Action Economics Forecast Survey. Three-month average growth of 99,000 remained the weakest since March 2021 and below the most recent high of 345,000 per month in July.
Employment at medium-sized firms (50-499,000 employees) rose 68,000 (2.8% y/y) in November after increasing 74,000 in October, well below a 180,000 June high. Large business hiring (500+ employees) rose 33,000 (0.2% y/y) during November following a 14,000 October gain. These gains are improved from declines in both Q3 and Q2. Employment at small firms with less than 50,000 employees rose 6,000 (2.0% y/y) after rising 21,000 in October. These increases are well below the gains earlier in the year.
By industry group, goods-producing employment fell 14,000 (+2.6% y/y) after a 5,000 October decline and a 5,000 September rise. Hiring in the manufacturing sector declined 15,000 (-1.3% y/y), the third consecutive monthly drop. The number of construction jobs fell 4,000 (+4.9% y/y) after a 3,000 October gain. Natural resource & mining sector employment rose 5,000 (21.8% y/y) following a 3,000 October slip.
Service-producing jobs rose 117,000 last month (1.9% y/y) following a 111,000 rise and remained well below July’s 269,000 increase. Holding back the overall gain, professional & business services employment declined 5,000 (-0.3% y/y), the third consecutive monthly drop. The number of leisure & hospitality jobs fell 7,000 (+8.1% y/y) after a 27,000 October increase. To the upside, education & health services employment rose 44,000 (1.8% y/y) last month after improving 40,000 in October. Trade, transportation & utilities payrolls rose 55,000 (1.4% y/y) in November after gaining 29,000 in the prior month. Financial activities employment rose 11,000 (-1.5% y/y) after increasing 17,000 in both October and September. Information sector employment improved 4,000 (-1.3% y/y) following no change in October.
Growth in median annual pay for "job stayers" dipped to 5.6% y/y in November from 5.8% y/y in October, remaining well below a September 2022 high of 7.8% y/y. The earnings slowdown continued to be led by the leisure & hospitality sector, where a 6.5% y/y pay gain in November compared to 16.9% y/y growth in March 2022. Education & health services pay rose a lessened 6.2% y/y, down from a 7.3% y/y high last October. Financial sector earnings rose 6.0% y/y, below a 7.8% y/y high in November of last year, while information sector pay rose a lessened 5.2% y/y and remained below the 8.0% y/y peak in June 2022. Factory sector earnings rose 5.1% y/y versus a high of 7.8% y/y in September 2022. Pay increases for “job changers” decelerated to 8.3% y/y, below the 16.4% y/y peak in June 2022.
By Census region, the number of jobs in the South increased 58,000 last month (-0.7% y/y) after a 63,000 increase. Employment in the Northeast improved 59,000 (6.4% y/y) following a 19,000 October increase. Jobs in the Employment in the West fell 10,000 (+2.0% y/y) in November following a 44,000 rise. Midwest rose 2,000 (2.9% y/y) after declining 15,000 in October.
The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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