According to paycheck company ADP, businesses only added 113,000 new jobs in November. This figure falls short of economists’ prediction of a 128,000 increase, indicating slower hiring and a softer labor market in the U.S.
While the ADP payroll estimate is not always an accurate predictor of the government’s official employment report, both surveys suggest a decline in the labor market. Companies are not showing as much interest in hiring and are leaving job openings unfilled.
The government is expected to report that 190,000 new jobs were created in November, including government workers. This information comes from a poll conducted by the Wall Street Journal.
The Big Picture
The jobs market has lost some of its momentum this year. The Federal Reserve’s efforts to control inflation through higher interest rates have resulted in a slower economy. Consequently, businesses are not hiring as many workers and are trying to keep pay increases to a minimum.
Nevertheless, the labor market remains relatively strong, with an unemployment rate of just 3.9%. Businesses consistently complain about the lack of available labor. If unemployment remains low, there is a chance that the economy could avoid the typical recession that follows interest-rate increases.
Prior to the release of the ADP report, the Dow Jones Industrial Average and S&P 500 were expected to open higher in Wednesday trading.
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