U.S. private payrolls increased far less than expected in November, suggesting demand for labor was cooling amid high interest rates, a survey showed on Wednesday.
Private employment increased by 127,000 jobs in November, the ADP National Employment report showed. Data for October was unrevised to show 239,000 jobs created. Economists polled by Reuters had forecast private jobs increasing 200,000.
The ADP report, jointly developed with the Stanford Digital Economy Lab, was published ahead of the Labor Department’s Bureau of Labor Statistics’ more comprehensive and closely watched employment report for November on Friday.
The jury is still out on the ADP’s reliability in predicting the private payrolls component in the BLS employment report.
According to a Reuters survey of economists, private payrolls likely increased by 200,000 jobs in November after rising by 233,000 in October. With no job gains expected in the government sector, overall nonfarm payrolls are also forecast to have advanced by 200,000 jobs. The economy created 261,000 jobs in October.
Job growth is gradually slowing as the Federal Reserve’s aggressive interest rate hikes slow demand in the economy. Still, demand for labor continues to run strong.
Data on Wednesday is expected to show job openings remained elevated in October, according to a Reuters survey. There were 1.9 job openings for every unemployed worker in September.
The Fed has raised its policy rate by 375 basis points this year from near zero to a 3.75%-4.00% range in what has become the fastest rate-hiking cycle since the 1980s.
© 2022 Thomson/Reuters. All rights reserved.