With the pace of economic growth picking up in the last two quarters, one might expect a breakout month for job creation to come soon. ADP’s latest survey suggests that the wait will continue a while longer. The projection from the nation’s largest payroll management firm shows 208,000 jobs added in November, lower than September and October and a miss on expectations. It also shows why Democrats should worry about Barack Obama’s executive amnesty:
Private sector employment increased by 208,000 jobs from October to November according to the November ADP National Employment Report®. Broadly distributed to the public each month, free of charge, the ADP National Employment Report is produced by ADP®, a leading global provider of Human Capital Management (HCM) solutions, in collaboration with Moody’s Analytics. The report, which is derived from ADP’s actual payroll data, measures the change in total nonfarm private employment each month on a seasonally-adjusted basis. …
Payrolls for businesses with 49 or fewer employees increased by 101,000 jobs in November, down slightly from 103,000 in October. Job growth was down significantly over the month for medium-sized firms. Employment among companies with 50-499 employees rose by 65,000, well below October’s increase of 122,000. Employment at large companies — those with 500 or more employees — saw a rebound from 7,000 the previous month to 42,000 jobs added in November. Companies with 500-999 employees added 10,000 jobs, down from October’s 14,000. However, this drop was more than offset by the addition of 32,000 jobs by companies with over 1,000 employees.
Goods-producing employment rose by 32,000 jobs in November, down from 46,000 jobs gained in October. The construction industry added 17,000 jobs over the month, well below last month’s gain of 27,000. Meanwhile, manufacturing added 11,000 jobs in November, down slightly from October’s 13,000.
Service-providing employment rose by 176,000 jobs in November, down from 187,000 in October. The ADP National Employment Report indicates that professional/business services contributed 37,000 jobs in November. Expansion in trade/transportation/utilities grew by 49,000, just above October’s 48,000. The 5,000 new jobs added in financial activities was below last month’s 6,000.
The expectation from analysts for this precursor to the BLS data coming on Friday was 221,000. Neither number is exactly gangbusters, since the US economy has to add around 150,000 jobs a month to keep up with population growth. It’s still consistent with most of the readings in 2014, which have ranged from 121K in January to 297K in June. Five months have come in at 205-217K. Other than the June figure, there’s nothing so far to hint at dynamism in job creation despite the better GDP figures in Q2 and Q3.
The Wall Street Journal considers this a letdown:
Although a reading over 200,000 would have been considered strong a year ago, the latest ADP gain is a disappointment and is the lowest number of hires since August.
“The ADP employment report delivered data that failed to live up to expectations,” wrote Adrian Miller, director of fixed income strategy at GMP Securities, in a research note.
USA Today’s Paul Davidson thinks it won’t get much better for a while, either:
The private sector added 208,000 jobs in November, payroll processor ADP said Wednesday, as the labor market continued to defy mixed economic news. …
The U.S. economy is expected to slow in the current quarter after the best six-month stretch of growth in 11 years. That period marked a rebound from a first quarter contraction blamed on harsh winter weather. The labor market, however, has been generally consistent, posting average monthly gains of 229,000 this year, up from 194,000 in 2013.
I’m not sure how one can defy “mixed economic news,” but the phrase seems oddly apt in this case. The problem with these numbers isn’t that they’re altogether bad; they’re not. It’s that they aren’t coming in a maintenance period after a large expansion in job creation, with consistently high periods in the 300-400K per month range. It’s a more pleasant stagnation than we experienced in the first few years of the “recovery,” but it’s still only barely exceeding population expansion.
That’s a big problem for the administration, too, because the work-eligible population is about to explode. Barack Obama plans to offer worker status to as many as 5 million illegal immigrants by executive order, which comes on top of natural population expansion. At the rate Davidson notes, it would take thirty-two months to create enough jobs for half that amount, on top of creating jobs to cover natural population growth. The competition for entry-level work is about to get red-hot, and wages will stagnate for years because of it. Have fun selling that as a boon to the American working class, Democrats.