The one economic report that scores the highest in the economy is the U.S. Department of Labor’s Employment Situation Report. This measures the official unemployment rate, but it also tallies up the monthly payrolls for the nonfarm and private sectors. Investors have been using the ADP Payrolls report, released 48 hours ahead of the Labor Department report, as a preliminary tool to judge and predict what the payrolls report will be.
ADP announced that private sector employment increased by about 217,000 jobs from October to November. Bloomberg was calling for only 183,000 additions and Dow Jones (via the Wall Street Journal) was calling for 192,000. In fact, the highest Econoday figure from Bloomberg was calling for 205,000 jobs.
Small businesses (49 employees and fewer) accounted for 81,000 of those gains, followed by 62,000 from medium-sized (50 to 499 employees) businesses, and 74,000 came from large businesses (500+ employees).
For the gain measured in large businesses, companies with 500 to 999 employees added 57,000 jobs. That was the largest gain for this segment in the history of the ADP National Employment Report. Companies with over 1,000 employees gained 17,000 jobs, after adding 28,000 in October.
Then there is the sector-by-sector reading. Goods-producing employment rose by 13,000 jobs, down from 22,000 in October. The construction industry added 16,000 jobs, down from gaining over 30,000 in each of the two previous months. Manufacturing added 6,000 jobs in November, rebounding from two straight months of shedding jobs.
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As a reminder, America is a services economy. Service-providing employment rose by 204,000 jobs in November, a strong increase from an upwardly revised 174,000 in October. The report was broken down by the following in the services sector:
- Professional/business services contributed 59,000 jobs.
- Trade/transportation/utilities grew by 30,000.
- Financial services added 9,000 new jobs.
This sets the stage for a strong November payrolls report from the Labor Department. Bloomberg is calling for 190,000 in nonfarm payrolls and 185,000 in private sector payrolls. The unemployment rate is expected to remain flat at 5.0%.
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