U.S. private employers brought back more jobs than expected in November, with companies gradually filling widespread vacancies as the economic recovery moved further along.
Private payrolls grew by 534,000 in November compared to October, ADP said in its closely watched monthly report. Consensus economists were looking for private payrolls to rise by 525,000, according to Bloomberg data. Private payrolls had grown by 570,000 in October, according to ADP’s revised monthly figure.
The services sector added back 424,000 payrolls last month, contributing to most of the headline gain in ADP’s report. Within services, leisure and hospitality employers added another 136,000 jobs on net, with some of the industries most deeply impacted by the pandemic last year recovering further. Professional and business services employers added back 110,000 payrolls, and trade, transportation and utilities employers brought back 78,000. Within the goods-producing sector, both manufacturing and construction employers saw jobs grow by at least 50,000.
Private-sector employers have added back jobs on net in every month so far in 2021, reflecting a steady improvement in the labor market as the broader economy marched back toward pre-pandemic conditions. The latest ADP data did not capture the period when concerns over the newly discovered Omicron variant first unfolded at the end of November, but some economists suggested its emergence would not likely seriously derail the economic recovery.
“Since the pandemic, each COVID wave has had less of an impact on the economy. For example, during the COVID wave that peaked in January, there was a meaningful slowdown in restaurant traffic. In the most recent wave, there wasn’t a slowdown,” Neil Dutta, head of economics at Renaissance Macro Research, wrote in a note Tuesday. He added he was “skeptical that recent concerns over coronavirus will spill into deeper issues for the U.S. economy.”
But even before the latest wave of virus-related fears resurfaced, the labor market was facing a host of roadblocks in returning to its pre-pandemic state. Job openings have remained near record highs and the pace of hiring has not kept up with demand, leading to competition for workers, fast-rising labor costs and other disruptions. Still, the overall trajectory of the labor market and broader economy has been toward improvement.
“The latest data show the U.S. economy firing on all cylinders: Consumer spending in surging, the labor market is recovering, exports are bounding and momentum in business investment is positive,” Rubeela Farooqi, chief economist at High Frequency Economics, wrote in a note. “Indeed, momentum is picking up even as the economy continues to face headwinds from supply chain disruptions and labor market dislocations.”
More data on the state of the labor market will be due on Friday, when the Labor Department releases its “official” government jobs report. Consensus economists are looking to see non-farm payrolls rose by 548,000 in November, accelerating modestly from October’s better-than-expected 531,000 rise. As usual, ADP’s print serves as an imprecise indicator of payroll trends seen in the government data due to differences in methodology: ADP tallies employees actively on companies’ payrolls toward its headline figures, while the Labor Department only counts those paid during the survey period towards its non-farm payrolls.
Source: Yahoo Finance
