Private hiring slows in November to just 127,000 jobs
Private companies added an estimated 127,000 jobs in November, a sharp slowdown from October and the lowest monthly gain in nearly two years, according to a new ADP jobs report.
The estimate, which does not include public sector jobs, fell from 239,000 private jobs added in October and marks the latest sign of a cooling labor market as the Federal Reserve rapidly raises interest rates.
Private companies added 357,167 monthly jobs on average last year, a steady pace spurred by the nation’s pandemic recovery that has since slowed amid the central bank’s monetary tightening, which is aimed at lowering inflation.
The November report marks the lowest monthly gain since January 2021, when private sector hiring fell as COVID-19 cases soared nationwide. But annual pay was still up 7.6 percent year over year, 0.1 percentage points lower than last month’s report.
“Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains,” said Nela Richardson, ADP’s chief economist. “In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing.”
The closely watched federal jobs report, which includes public-sector hiring, will be released on Friday.
ADP’s report estimated sharp growth in leisure and hospitality private jobs, adding 224,000 in November. The trade, transportation and utilities sector as well as education and health services sector also both saw gains.
But those gains were partially offset by sharp drops in private manufacturing hiring, which fell by 100,000 jobs in November, and professional and business services, which was down 77,000.
The tight labor market and large number of job openings have posed obstacles to alleviating high inflation, which hit a roughly 40-year record earlier this year.
Inflation has since eased, with annual inflation falling to 7.7 percent in October from 8.2 percent in September, according to the consumer price index.
After four consecutive 75 basis point rate hikes, the Fed has signaled a willingness to temper future increases as worries grow that its increased borrowing costs will slow down growth enough to cause a recession.