ADP: Hiring Slows in November to a Nearly Two-Year Low
The November ADP report showed that job growth is starting to cool in response to the Fed's efforts to fight inflation.


A private reading of business hiring fell in November to the slowest pace in nearly two years, raising the possibility that job growth is beginning to cool in response to hawkish Federal Reserve policy.
Businesses added 127,000 new jobs in November, according to a new report by ADP Research Institute in collaboration with the Stanford Digital Economy Lab. That was the weakest rate of hiring since January 2021 and came in well short of economists' estimates for the creation of 200,000 new jobs. Wage gains – a key metric in helping to guide Fed policy – also moderated in November.
"Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains," ADP Chief Economist Nela Richardson said in a press release. "In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing."

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
ADP's monthly data always comes out two days before the Bureau of Labor Statistics releases its official nonfarm payrolls report. Market participants are looking for any incipient signs of weakness in a labor market that's contributing to higher wages and helping fuel the worst inflation in four decades.
As for where hiring was weakest and strongest, the most interest-rate sensitive industries posted the worst November figures. For example, hiring in construction fell by 2,000 last month, while manufacturing hiring declined by 100,000, ADP said. Other areas of hiring weakness included professional and business services, financial activities and information technology.
On the brighter side of the job market, hiring was strongest in the leisure and hospitality industries. These businesses added 224,000 new jobs, helped by the continuing rebound from COVID-19 lockdowns. Trade, transportation and utilities companies boosted hiring by 62,000 workers last month, while natural resources and mining added 16,000 workers to their payrolls. Hiring in education and health services was also positive in November, with new job creation of 55,000 positions.
By business size, mid-sized companies with 50 to 239 employees were the most active in hiring new workers. These establishments added 283,000 employees in November. The smallest businesses, or those with 1 to 19 employees, were also hiring. But businesses of all other sizes saw net declines in hiring.
As for reading the ADP report to get a bead on what Friday's jobs report will tell us: forget it. The former has a poor track record of predicting the latter. The market is praying for emergent signs of weakness when the nonfarm payrolls report comes out on Friday – the idea being that it will push the Fed to slow its path of rate hikes – but that very much remains to be seen.
Economists surveyed by Bloomberg forecast November payrolls to grow by 200,000 and the unemployment rate to remain unchanged at 3.7%.
The November ADP report shows that Fed policy to cool the economy is working at least directionally, but there's no substitute for the official Labor Department figures. Until then, market participants will just have to sit tight.

Dan Burrows is Kiplinger's senior investing writer, having joined the august publication full time in 2016.
A long-time financial journalist, Dan is a veteran of SmartMoney, MarketWatch, CBS MoneyWatch, InvestorPlace and DailyFinance. He has written for The Wall Street Journal, Bloomberg, Consumer Reports, Senior Executive and Boston magazine, and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among other publications. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange and hosted a weekly video segment on equities.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about equities, fixed income, currencies, commodities, funds, macroeconomics, demographics, real estate, cost of living indexes and more.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade stocks or other securities. Rather, he dollar-cost averages into cheap funds and index funds and holds them forever in tax-advantaged accounts.
-
Alaska Airlines to Buy Hawaiian: Get Bonus Miles Now
How to use the Alaska Airlines credit card and frequent flyer program to save on trips to Hawaii, Alaska and beyond.
By Ellen Kennedy Published
-
11 Reasons to Consider a 1031 Exchange
Deferring capital gains taxes might be at the top of the list, but growing your portfolio and your wealth and helping with estate planning are also compelling reasons.
By Daniel Goodwin Published
-
Is A Recession Looming? Two Big Bank CEOs See It That Way
Recession is likely, Citi's CEO told a Senate panel today, a sentiment echoed by JP Morgan's chief executive last week.
By Joey Solitro Published
-
More Signs of Belt-Tightening and a Slowing Economy: The Kiplinger Letter
The Kiplinger Letter Although fewer banks are tightening lending standards, more businesses and households are feeling the squeeze.
By Rodrigo Sermeño Published
-
The Era of Super-Low Interest Rates Could Be Over: The Kiplinger Letter
The Kiplinger Letter We’re likely never going back to the historically low rates that prevailed in late 2019 and early 2020.
By David Payne Published
-
The Fed Holds Interest Rates Steady
The Fed cautions that inflation remains high and it is prepared to adjust its monetary policy ‘as appropriate if risks emerge.’
By Esther D’Amico Published
-
Banks Lost Billions on Bad Loans Last Quarter: Kiplinger Economic Forecasts
Economic Forecasts Bank deposits are also down, and more people are tapping into their savings.
By Rodrigo Sermeño Published
-
Kiplinger Special Report: Key Business Costs for 2024
Economic Forecasts Looking at business costs for 2024, expect slight cost increases across the board, from insurance rates to shipping expenses. Profits will be up, too.
By John Miley Published
-
What Is the Federal Funds Rate?
The federal funds rate can impact a host of borrowing costs, and thus the entire U.S. economy. Here, we take a closer look at this key metric.
By Jeff Reeves Published
-
Is It Prime Time for Money Market Funds?
The Fed's interest rate hike could be a boon for savings accounts. Here's why.
By Seychelle Thomas Published