Private Sector Employment in the U.S. Falls Short of Expectations

The report published by ADP indicates that job growth in the private sector in the U.S. was lower than expected in November. Private sector employment stood at 146,000, falling short of expectations which were around 163,000 to 166,000.

In November, private sector companies created 146,000 new jobs, which is below the downwardly revised figure of 184,000 from October and below economists’ forecast of 163,000. This suggests a slowdown in the labor market and a different trend in economic growth than anticipated. According to the ADP report, the education and health services sectors led job growth by creating 50,000 jobs in the month. They were followed by construction with 30,000 new jobs and trade, transportation, and utilities with 28,000. The other services category reported the creation of 20,000 new jobs. However, the manufacturing sector experienced a job loss, with a decrease of 26,000 positions. Additionally, there was a reduction of 17,000 jobs observed in small businesses with fewer than 50 employees.

Wage growth accelerated, with the ADP report noting that wage increases reached 4.8% and accelerated for the first time since October. This marked the first increase recorded in 27 months, indicating renewed wage pressures in the labor market. ADP’s chief economist, Nela Richardson, stated, "While the overall growth of the month was healthy, notable performance differences among sectors were evident. The manufacturing sector showed the weakest growth since spring." Richardson also noted continued weak performance in the financial services and leisure and hospitality sectors.

Official non-farm payroll data in the U.S. will be released on Friday, with expectations for a growth figure of 214,000. These expectations suggest that, despite the slow down in the private sector in November, the overall labor market continues to grow.