In November, private sector employment in the U.S. saw an increase of 103,000 jobs, according to the ADP National Employment Report. This figure, however, fell short of economists' projections, indicating a slowdown in job growth. The report also noted a 5.6% year-over-year increase in wages, although wage growth hit its lowest level since 2021, with minimal pay increases for workers.
The distribution of job growth varied across different sectors and business sizes. Small businesses added 6,000 jobs, while mid-sized businesses contributed significantly more, adding 68,000 jobs. The service sector saw an increase of 117,000 jobs, making up the bulk of the new jobs. However, goods-producing jobs declined by 14,000, and the professional and business services sector lost 5,000 jobs.
The leisure and hospitality industry, which had been a major job creator during the post-pandemic recovery, shed 7,000 jobs in November. The report also highlighted regional differences, with the West region experiencing a net decline in jobs.
The average pay increase for job-changers was 8.3%, marking the lowest since June 2021. The report suggests a hiring slowdown for next year, with more moderate hiring and wage growth expected in 2024. The jobs market has lost some momentum this year due to higher interest rates and businesses being more cautious in hiring and pay increases.
The ADP report, which provides a high-frequency, near real-time measure of U.S. employment based on actual payroll data, is not an accurate predictor of the government's official employment report. However, both surveys suggest a deterioration in the labor market. The government is expected to report 190,000 new jobs created in November.