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US private sector adds fewer jobs than expected in November

By Michele Maatouk

Date: Wednesday 06 Dec 2023

(Sharecast News) - Private sector employment in the US rose less than expected in November, according to figures released on Wednesday by ADP.
Employment increased by 103,000 from October, versus expectations for a 130,000 increase. Meanwhile, October's jump was revised to 106,000 from 113,000.

Small businesses with fewer than 50 employees added 6,000 jobs, while medium businesses with between 50 and 499 employees added 68,000 jobs. Large businesses with more than 500 employees created an additional 33,000 jobs.

The services sector added 117,000 jobs, while the goods-producing sector saw a 14,000 decline.

The data also showed that job-stayers saw a 5.6% increase in annual pay, the slowest pace since September 2021. Job-changers saw pay growth of 8.3%, the smallest year-over-year increase since June 2021.

Nela Richardson, chief economist at ADP, said: "Restaurants and hotels were the biggest job creators during the post-pandemic recovery.

"But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024."

Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "ADP is a deeply unreliable guide to the official payroll numbers, with errors over the past year ranging from a 337K undershoot in January to a 348K overshoot in June.

"Moreover, we see no consistent pattern in the errors. The November ADP print might be right, but that would be a coincidence rather than evidence ADP is a consistently useful indicator. The Homebase and ISM services employment numbers point to a much bigger increase in November payrolls, but they aren't always right, either.

"Bottom line: consistently forecasting payrolls is hard, not least because the official margin of error in the headline print is about +/-130K, and markets react to far smaller errors against consensus than that."

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