Private sector employment grew by 103,000 jobs in November, while annual pay rose 5.6% year-over-year, payroll giant ADP reported Wednesday, seeing signs of a hiring slowdown for next year.
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Service-providing businesses added the bulk of the new jobs last month, at 117,000, offset by a loss of 14,000 jobs in the goods-producing sector. The professional and business services sector, which includes accounting and tax preparation, lost 5,000 jobs, but the financial activities sector added 11,000 jobs. The leisure and hospitality industry lost 7,000 jobs.
"I really do think that this report for November marks the end of an era when it comes to the labor market recovery," said ADP chief economist Nela Richardson during a conference call Wednesday with reporters. "Leisure and hospitality has been the workhorse of the post-pandemic recovery." She expects to see more moderate hiring and wage growth in 2024.
People who stayed at their jobs experienced a 5.6% year-over-year pay increase in November, but that was the slowest pace of gains since September 2021. Those who changed jobs saw slowing pay growth, posting pay gains of 8.3%, the smallest year-over-year increase since June 2021. The premium for switching jobs was the smallest level in three years of data from ADP. People who stayed at their jobs in the professional and business services sector saw a 5.5% pay increase year over year.
"Where we go from here in 2024 is that we're likely to see lower pay growth, not as many outside hiring months where you see more than 200,000 private sector job gains," said Richardson. "This is a pivot from some of the numbers that we've grown accustomed to, and in that sense, it is a return to normal."
