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The Key Takeaways
- ADP’s National Employment Report, November 2011, showed the private sector job growth at 146,000 was less than anticipated.
- According to economists, the weak hiring of small and medium-sized businesses in manufacturing has also contributed to the low results.
- This private sector report comes before Friday’s U.S. Payrolls Report for November. Economists expect jobs to recover after labor strikes and storms dragged October’s numbers down.
Investors are watching the labor market closely for signs of weakness.
The ADP National Employment Report showed that private sector payrolls increased by 146,000 jobs in November, less than the 163,000 projected by economists surveyed by Dow Jones Newswires and The Wall Street Journal. The numbers are down also from those of October, when they were reduced to 184,000 totals from an original reported 233,000.
In November, the data collected by the private payroll provider revealed that manufacturing companies reduced their staffing levels by 26,000.
“While overall growth for the month was healthy, industry performance was mixed,” Nela Richson, Chief Economist at ADP. “Manufacturing was the weakest we've seen since spring. Financial services and leisure and hospitality were also soft.”
This report may not accurately reflect the hiring trends of future jobs
These numbers are released ahead of Friday’s release of the U.S. November payroll report, where it is expected that employment will rebound after disruptions caused by storms and strikes. Federal Reserve officials will consider employment trends when they meet in December to decide whether or not rates should be cut again.
An economist has said that the ADP numbers may be lower than predicted, but this is not the same for government data. Diane Swonk, KPMG's chief economist, said that the government and ADP reports diverged last month.
"The [ADP] data no longer acts as a forecast for the BLS survey but is an important independent look at the labor market," Swonk wrote in a post on social media platform X. "It was not as suppressed by storms & strikes as we saw in the BLS survey, which means it is likely understating the rebound in the official data."
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