The ADP report for private nonfarm employment in November posted a slightly lower gain than in October yet it still beat market expectations, a sign that the labor market is continuing to recover.
The headline figure for net monthly change in U.S. payrolls eased to 534,000 on the month, down from 570,000 in the prior month, according to the ADP report released on Wednesday.
The main driver of the overall monthly increase, the third in a row, came from large firms with more than 1,000 employees, which posted a gain of 234,000 jobs—or 43.8% of the total change. But it was a sharp decline from October, when large firms added 294,900 jobs.
Net gain in employment also slowed down for small firms with fewer than 50 employees, to 115,100 from 117,900 previously.
At the same time, firms with 50 to 499 employees added 142,100 jobs, up from 118,100, and those with 500 to 999 employees gained 42,900 positions, up from 39,100.
On the industry level, both goods-producing and service-providing industries showed moderation in net monthly change in employment, led by manufacturing for the goods-producing sector and leisure and hospitality for the service-producing sector.
While leisure and hospitality has been declining since the broad reopening of the economy at the beginning of the summer, manufacturing industries and the goods-producing sector in general have bounced back strongly from the July slump induced by supply chain woes and labor shortages.
The takeaway
Although the ADP data does not capture as complete a picture of the labor market as the monthly report from the Bureau of Labor Statistics, which will be released on Friday, it is another strong data point that reaffirms the rebound of the labor market and will play some part in the Federal Reserve’s consideration for monetary policies.
