Reasons for concern? Inside the November ADP Jobs Report
Bottom Line: One month is not a trend. It’s been said many times before and will forever be true. It’s also true that a trend has to start somewhere. The ADP private sector jobs report for November was anything but exceptional as only 67,000 jobs were added during the month. But it’s also just one month, at least for now. The question comes down to why job growth was cut in half in November. Is it because employers are having an increasingly harder time adding employees with near record low unemployment? That would be a good reason. Is it because demand significantly dropped in the economy? That would be a bad reason. Let’s take a closer look...
Here’s where the jobs were added:
- Small businesses: +11,000
- Medium sized businesses: +29,000
- Large businesses: +27,000
The first thing to note is that while the gains were small, they still occurred across all company sizes. That’s important. It’s illustrative of an economy that’s still intact, even if perhaps slowing in growth. Most important is the small business growth. The bottom line is that small companies are only continuing to add because of real-time demand. If the economy were heading the wrong way small business hiring would be the first place to look.
As for the industries adding the most...
- #1 Education and healthcare
- #2 Professional and business services
- #3 Leisure and hospitality
One area for potential concern comes with manufacturing and construction jobs. Both saw small declines during the month. They are both economically sensitive and we recently did receive disappointing manufacturing data. This report backs up that data. Again, there’s not enough here to be overly concerned but if we were to take a step back from here it would be concerning.