The ADP National Employment Report for November showed private payrolls were up 67,000. October was revised a tad lower to 121,000 (previously 128,000). This was well below market expectations and could lead to some downward revisions in estimates for Friday’s November Employment Situation. However, the ADP number more than occasionally misses the BLS data and should be read with caution. The important point is that in spite of a few struggling sectors, employment is still gaining in spite of some headwinds.
Employment in the goods producing sector was down for a third month in a row and has been lower in six of the past seven months. November had a decline of 18,000 that was equally across construction, natural resources, and manufacturing.
Employment in the service sector was up 85,000 in November, much of which was in professional and business services which rose 28,000 and healthcare which rose 36,000.
As I said above, the November numbers should be read with caution. The increase is anemic, but one month does not make a trend. It should not be a surprise if the pace falls off due to slower growth and cautious hiring, but there may also be an element of shortages of skilled workers as well. I would put most of the blame on the present recession in the factory sector as well as low prices for energy commodities which discourage oil and gas production. Neither of these sectors are likely to turn around in the near term, so a mediocre labor market could be in the picture.
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