Private Sector Hiring Jumped in November to Three-Year High
Private employers gave the job market a helping hand in November, adding 93,000 jobs, ADP (ADP) announced Wednesday. It's the second straight month of significant gains -- the biggest in three years -- and it provides more evidence that the employment outlook may be picking up.
Equally significant, October's gain was revised substantially higher, up to 82,000 new jobs from the 43,000 initial estimate. A Bloomberg survey had expected private employers to add 72,000 jobs in November. By comparison, they added 29,000 in September.
ADP said the November report "shows an acceleration of employment and suggests the nation's employment situation is brightening somewhat."
Still Not Enough to Lower Unemployment
Even so, given the depth of job losses during the 2007-2009 recession, ADP cautioned against premature euphoria. "Nevertheless, employment gains of this magnitude are not sufficient to lower the unemployment rate, which likely will remain above 9% for all of 2011," ADP said. "Furthermore, given modest GDP growth in the second and third quarters, and the usual lag of employment behind GDP, it would not be surprising to see several more months of only moderate gains in employment even as the economic recovery gathers momentum."
Separately, private placement firm Challenger, Gray & Christmas said planned layoff announcements by U.S. employers rose 28% to 48,711 in November from 37,986 in October, CNNmoney.com reported Wednesday. It was the highest job-cut total since March, when 67,611 were chopped. However, November's figure is still down 3.3% compared to November 2009.
The ADP report showed that job gains were concentrated in small businesses, which added 54,000. Midsize companies added 37,000, and large businesses added 2,000.
An End to Big Job Losses?
In November, construction employment declined 3,000 -- its smallest loss since March 2007 -- bringing jobs lost in the sector to 2.31 million since the January 2007 peak. Services added 79,000 jobs, the goods-producing sector added 14,000 jobs -- its first monthly increase since March 2007 -- and manufacturing added 16,000. Financial services employment was flat.
ADP's November report is clearly a positive economic data point. Not only did that month's gains exceed expectations but October's total was revised almost 100% higher. Combined, the two reports suggest a job market that's rebounding. At a minimum, they provide strong evidence that the long stretch of large monthly job losses is ending.
Still, policymakers -- including the Federal Reserve -- will remain focused on job creation. The U.S. needs to create 100,000 to 125,000 jobs per month just to keep the unemployment rate, currently a very high 9.6%, from rising.
Next up is the more-telling U.S. Labor Department monthly nonfarm payroll report, containing both private and public sector data, to be released Friday, Dec. 3. It's now expected to show an increase of 168,000 jobs, according to a Bloomberg survey of economists, after an October gain of 151,000 jobs.