Private Payroll Growth Lower Than Expected in November

Private payrolls grew at a slower pace than economists were expecting, according to the ADP National Employment Report.

• Private employers added 103,000 jobs in November, slightly below the 106k in October and the second lowest level in the last 33 months.

• Economists projected a bigger 130k increase in November.

Service Growth. The service sector was entirely responsible for the positive number this month with 117k jobs created in November thanks to trade/transportation/utilities adding 55,000 and education/health services adding 44k.

• The goods producing sector was actually in the red with 14k lost jobs thanks to manufacturing shedding 15,000 jobs and construction losing 4k.

Pay. Pay continues to outpace inflation even though growth has slowed to the lowest level since 2021.

• Job-stayers saw a 5.6% pay increase in November, the slowest pace of gains since September 2021.

• Job-changers, too, saw slowing pay growth, posting pay gains of 8.3%, the smallest year-over-year increase since June 2021. The premium for switching jobs is at its smallest in three years of data.

Analysis. Nela Richardson, ADP chief economist, said that where job creation is happening, or not happening, is telling. “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.”