Private sector employment declined by 32,000 in November, payroll giant ADP
Among those, small businesses with between one and 19 employees lost 46,000 jobs, while businesses with between 20 and 49 employees shed 74,000 jobs. Medium-size businesses, on the other hand, gained a total of 51,000 jobs in November, including 31,000 in businesses with between 50 and 249 employees, and 20,000 in companies with between 250 and 499 employees. Large establishments with 500 employees or more gained 39,000 jobs.
"It is both mom-and-pop, Main Street companies and firms, small businesses and establishments that are really weathering what is an uncertain macro environment and a cautious consumer," said ADP chief economist Nela Richardson during a conference call with reporters Wednesday.
The service-providing sector lost a total of 13,000 jobs last month, including 26,000 jobs lost in professional and business services such as accounting and tax preparation and 9,000 in financial activities such as banking, although the leisure and hospitality industry added 13,000 jobs. The goods-producing sector lost 19,000 jobs, including 18,000 in manufacturing and 9,000 in construction, offset by 8,000 gained in natural resources and mining.
Year-over-year pay for those who stayed at their jobs rose 4.4% in November, but that was down from 4.5% growth in October. For those who changed jobs, annual pay growth was up 6.3% in November, but that too slowed from 6.7% growth in October. In professional and business services, the average annual growth rate for job stayers was 4.2% in November.
"There are a lot of different angles of concern for the smallest firms," said Richardson. "It's about supply. It's about high price levels. Even if you think that inflation is declining or moderate, or any tariff impact is transitory, I still have to note that if you look at cumulative price increases over the last five years, it's up around 25%."
She noted that rate was under 10% before the pandemic. "Small businesses are not as able to navigate higher price levels and even modest or higher than modest inflation at a 3% level will have an impact when price levels are already so high," said Richardson. "So in that sense, one of the things that small businesses can do in order to help offset the higher price levels — beyond passing those prices to the consumer and slumping their demand — is to change their hiring patterns. And I think that's what we're seeing in November: curtailed, maybe delayed hiring for the month."
