Wednesday, December 4, 2019
Private-sector payrolls reported this morning by Automatic Data Processing ADP disappointed, coming in at just 67K new private-sector jobs created in November. This is well down from October’s headline number, which had been revised down from 125K to 121K. November’s total cuts those figures basically in half.
Goods-producing posted a negative for the first time in recent memory: -18k last month, while Services took up the slack but still registered just 85K new jobs last month. For the past several quarters, we’d been repeating the mantra than any jobs growth over 100K per month was enough to absorb the retiring baby boomers exiting the workforce. We’re now beneath this level by a considerable margin; we’ll find out in time whether this is a minor blip or something bigger.
Medium-sized companies (50-499 employees) brought in 29K new private-sector jobs to lead the way, with large companies at 27K and small businesses at 11K. Digging deeper, firms with between 1 and 19 employees lost 15K private jobs in November, pointing to a real sign of weakness in our current labor force. Very small companies in goods-producing industries are feeling the brunt of things like the prolonged trade war with China, and this looks to be finally showing up in the data.
Education/Health Services once again provided the highest number of new private-sector jobs with 39K, while Leisure/Hospitality came in at +18K. But Trade/Transport, which had helped buoy our job market for the past several quarters, if not longer, took a hit last month, posting -15K. Construction and Manufacturing were down 6K each, as well.
For Friday’s non-farm payroll numbers, provided by the U.S. Bureau of Labor Statistics (BLS), analysts’ expectations had been for around 189K new jobs — including public-sector (government) employment — with an Unemployment Rate steady at an historically strong 3.6%. But with private-sector data coming in at barely a third of that overall total, we may see some analysts pull back on their Friday estimates.
To be clear, immediate data from ADP and BLS jobs reports are often at odds with each other; only over time and with revised numbers in future months do we see that they do represent employment trends generally in line with each other. Further, it’s way too early to determine that we’re seeing a major slowdown in employment based on one ADP survey. But Friday’s numbers will be looked at very closely for signs the jobs market is declining in a bigger way than had been expected.
Mark Vickery
Senior Editor
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