Private sector employers added 217,000 jobs in November, according to payroll giant ADP, as the economy continues to strengthen.
Small businesses added 81,000 jobs last month, down from 91,000 in October. That total included 46,000 at businesses with between one and 19 employees and 35,000 at businesses with between 20 and 49 employees. Midsize businesses with between 50 and 499 employees added 62,000 jobs last month, down from the 67,000 added in October. Large businesses added 74,000 jobs in November, up from 37,000 in October. The total included 57,000 jobs at businesses with between 500 and 999 employees, and 17,000 at businesses with 1,000 employees or more.
Service-providing employment rose by 204,000 jobs in November, a strong increase from an upwardly revised 174,000 in October. The professional and business services sector, which includes accounting and tax preparation along with other types of services, contributed 59,000 jobs, the largest increase in this sector since June of this year. However, the 9,000 new jobs added in financial activities were below the average of the last four months, which ranged from 11,000 to 13,000 per month. The combined trade, transportation and utilities sector grew by 30,000 in November, down from 36,000 in October. Franchise businesses added 25,600 jobs in November.
Goods-producing employment rose by 13,000 jobs in November, down from 22,000 the previous month. The construction industry added 16,000 jobs after gaining over 30,000 in each of the two previous months. Meanwhile, manufacturing rebounded from two straight months of shedding jobs to add 6,000 in November.
“The American job machine remains in high gear,” said Mark Zandi, chief economist at Moody’s Analytics, which compiles the monthly national employment report with ADP. “Private sector employment grew well over 200,000 in the month of November. That’s consistent with the very solid, strong growth we’ve been getting for more than three years. An average of 200,000 per month has been our performance, consistently so. That is really very good. It’s almost double the pace of the growth in the working age population. Thus, the economy is quickly absorbing whatever slack remains in the labor market. The unemployment rate has fallen sharply. We’re down to 5 percent, which historically is a good threshold for full employment.”
He acknowledged that not everyone is being counted in the official employment tally, though.
“Of course, we have a lot of underemployed, similar to part-timers who would like more hours, and discouraged workers who stepped out of the workforce and aren’t looking and aren’t counted as unemployed, but would take a job if one were available,” said Zandi. “We'll absorb those folks. In fact, by my arithmetic, if we maintain the current pace of job growth, of around 200,000 per month, we’ll be back to full employment, meaning we’ll absorb all of the unemployed and underemployed by the coming summer. We’re getting there.”
He is also seeing some pickup in wage growth from ADP’s data and expects to see similar findings when the official government report from the U.S. Bureau of Labor Statistics comes out on Friday. “Everything feels amazingly good in the labor market,” said Zandi. “We are doing very well, and we will have finally dug ourselves out of the deep hole we got into in the Great Recession by mid-summer.”
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