179,000 jobs were added in November to the U.S. labor market. The latest employment report from the ADP (Automatic Data Processing) National lends credence to recent speculation that US economic activity has peaked, with strong labor market performance but a slight deceleration in job growth.
Key Takeaways
- Job growth has slowed down.
- 70 percent of all new jobs this month were added by midsize businesses, and the growth demonstrates that these businesses can provide strong wage packets and benefits.
- Job growth has most likely reached a peak.
- The lack of any impact from natural disaster in this month’s report suggests that the slowdown is simply related to the labor market capacity.
The gain of 179,000 jobs was considered disappointing - October’s initially estimated gain of 227,000 was revised down to 225,000.
Small businesses added 46,000 jobs in November and large businesses added 13,000 with the remaining 119,000 jobs created by mid-sized businesses.
Of the total, 59,000 jobs were created in the business and professional sector, 49,000 in education and health, and 26,000 in hospitality. 10,000 jobs were added to the construction industry and 4,000 to the manufacturing sector.
The labor market has been exceptionally strong this year and the unemployment rate of 3.7% is expected to continue. Jobs are still being created at a healthy pace according to the report, with a downturn in the growth of payrolls pointing to a softening trend in the growth of the labor market and perhaps national economic expansion in general.
The Capital Spectator’s point forecast for the 1-year change shows a slight decrease from October’s 2.0% to 1.9% in November. Projections for the 1-year change in ADP payroll estimates show a slow but steady deceleration in growth.
ADP Employment Disappoints pic.twitter.com/AuFcQnRv1G
— mcm-ct.com (@mcm_ct) December 6, 2018
Expert Outlook
“On the surface, the data are modestly weaker than seems consistent with consensus expectations for payrolls in the [Labor Department] report tomorrow; the consensus is looking for 200,000 for private payrolls and 198,000 for total payrolls,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
Market Reaction
Gold prices may have benefited from the market reaction to the employment figures, beating back modest price pressure seen before the report was released and up 0.19% on the day with spot gold trading at $1,239.5 at the time of writing.
Gold Price Chart
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