- US private-sector firms created 534,000 jobs in November, ADP said in its monthly hiring report.
- That beat the 534,000-payroll estimate but marked a small slowdown from October's gain.
- The print is likely the last to show the hiring recovery's pace before the Omicron variant's impact.
The hiring recovery continued to shine in November, a hopeful signal as the Omicron variant presents a new economic risk.
Private payrolls gained by 534,000 last month, ADP said in its monthly hiring report. Economists surveyed by Bloomberg expected an increase of 525,000 private-sector jobs. The reading also marks a small deceleration from October's revised count of 570,000 new jobs.
The labor market charged closer to full recovery through November. The month saw daily COVID cases continue to decline from September's highs, albeit at a slower pace. Holiday season spending ramped up amid Black Friday and Cyber Monday. While consumer sentiment held at dismal levels, Wall Street boosted its forecasts for fourth-quarter growth on hopes for a stronger rebound.
Recent reports on the labor market also point to resilient progress. Filings for unemployment insurance fell to 199,000 in the week that ended November 20, marking the lowest level since 1969 and a full recovery for jobless claims. Continuing claims — which track Americans receiving UI benefits — also dropped, suggesting fewer workers are being laid off and more are finding work.
Economists expect the government's jobs report to show similarly strong growth when it's released on Friday. The country is expected to have added 550,000 nonfarm payrolls through November, a slight improvement from the 531,000 jobs gained the month prior. The unemployment rate is forecasted to slide to 4.5% from 4.6%, continuing the slow but steady return to pre-crisis levels.
ADP's latest data suggests such robust job creation is likely. And as the Omicron variant clouds the recovery's path, strong readings on the labor market's recovery are more important than ever.
Services continue to dominate the hiring recovery
Job creation remained uneven as service-sector businesses rushed to recoup massive losses from earlier in the COVID crisis. Services counted for 424,000 of November's added payrolls, according to ADP. Such businesses have counted for the bulk of new jobs through 2021 since they were the businesses hit hardest by pandemic lockdowns.
The leisure and hospitality sector posted the largest gain, adding 136,000 jobs through the month. Professional and business services followed with an increase of 110,000 jobs.
Goods-producing firms added 110,000 payrolls last month. Construction and manufacturing businesses counted for most of the increase, taking on 52,000 and 50,000 new jobs, respectively.
The ADP print also brings total job gains during the recovery to 15 million. That leaves roughly 5 million payrolls left to be recouped. Should job creation continue at the pace seen over the last three months, a complete hiring recovery could arrive in mid-2022.
The path to creating those last 5 million jobs will be anything but easy. While job creation picked up in the fall, labor force participation remains flat, signaling there are many Americans waiting on the sidelines and not yet looking for work.
The Omicron variant could also weigh on the recovery. The recent uptick in COVID cases and reports of the new variant "pose downside risks to employment and economic activity," Federal Reserve Chair Jerome Powell warned in testimony to the Senate Banking Committee on Tuesday. Even if vaccines protect against Omicron, fears of the virus can derail the recovery, particularly at service businesses, he added.
"Greater concerns about the virus could reduce people's willingness to work in person, which would slow progress in the labor market and intensify supply-chain disruptions," Powell said.