ADP Employment Growth Disappoints in November; Earnings Remain Firm

Nonfarm private sector payrolls increased 127,000 (3.1% y/y) during November after rising an unrevised 239,000 during October. The 192,000 September increase also was unrevised. The latest increase was the weakest since a 109,000 decline in January 2021. Average growth of 186,000 during the last three months was little changed from October and the weakest since March 2021, down from a high of 529,000 in September of last year. A 200,000 increase had been expected in the Action Economics Forecast Survey.

Median annual pay for "job stayers" was a fairly steady at 7.6% y/y during November. That stood significantly above a low of 1.6% in March of last year. The earnings increase was led by a 10.8% gain in leisure & hospitality earnings, though it was slower than 16.9% y/y growth in March. Factory sector pay rose a steady 7.5% y/y while professional & business service sector earnings rose a steady 6.8% y/y. By gender, female median pay rose 7.9% y/y while men's earnings rose 7.4% y/y. Pay gains have been strongest in the 16-to-24-year-old age group (14.8% y/y) followed by 10.8% in the 25-34 age group. Earnings in the 35-54 age group rose 7.4% y/y and 5.0% in the 55-85 age bracket. These increases are up versus early last year.

Small businesses hiring (1-49 employees) declined 51,000 (+1.3% y/y) and reversed two months of increase. The 2,000-average gain during the last three months compared to 151,000 in January. Employment at firms with 50-499 employees rose 246,000 (4.4% y/y) after a 218,000 October gain. The 189,000 three-month average increase was improved from 124,000 in September. Employment at large firms (500+ employees) declined 68,000 (+5.4% y/y) last month after easing 4,000 in October. Large-sized payrolls fell an average 5,000 during the last three months compared to a 107,000 average gain as of April.

By industry group, goods-producing employment declined 86,000 (+2.1% y/y) after an 8,000 October decline. Factory sector jobs declined 100,000 (+0.2% y/y) the largest of three consecutive monthly declines. Construction employment eased 2,000 (+3.4% y/y), down for the second month in the last three.

Service-producing jobs rose 213,000 last month following a 247,000 October increase. Annual growth of 3.3% compares to a 4.9% high as of April. Leisure & hospitality employment led the gain with a 224,000 (8.8% y/y) after rising 210,000 in October. Trade, transportation & utilities payrolls rose 62,000 (3.7% y/y) while education & health services jobs grew 55,000 (0.8% y/y). Elsewhere, employment declined. Professional & business services employment fell 77,000 (+2.4% y/y), off for the fourth straight month. Financial activities employment declined 34,000 (-1.3% y/y), down for the fifth straight month while information sector jobs fell 25,000 (+1.9% y/y), off for the fourth straight month.

By Census region, employment in the Northeast improved 158,000 (4.5% y/y) following a 50,000 increase. In the West, payrolls rose 12,000 (4.9% y/y) after surging 229,000 in October. Elsewhere in the country employment declined. Jobs in the Midwest fell 41,000 (1.3% y/y), down for the fifth consecutive month. Employment in the South weakened 2,000 (+2.7% y/y) and was off for the third straight month.

The ADP National Employment Report and Pay Insights data can be found in Haver's USECON database. Historical figures date back to January 2010 for private employment. Pay data date back to October 2020. The expectation figure is available in Haver's AS1REPNA database.