Labor data sources not affiliated with the government have become invaluable this year.
The White House recently announced that there will likely be no October Bureau of Labor Statistics jobs report due to the government shutdown, and the previously reported blowout positive September data have been called into question.
Largest private U.S. employers:
- Walmart: 1.6 million employees
- Amazon: 1.1 million employees
- UPS: 443,000 employees
- Target: 427,346 employees
- Home Depot: 418,000 employees Source: Ringover
The monthly ADP private sector jobs report is one of the most trusted non-government sources for jobs data.
ADP, one of the largest human resources technology companies in the country, bases its National Employment Report on anonymized weekly payroll data from more than 26 million U.S. private-sector employees, representing approximately one-fifth of the country’s private-sector workforce.
The data are so trusted that even the Federal Reserve had used them since 2018 to supplement BLS reports. However, that partnership ended in October under mysterious circumstances, the Wall Street Journal reports.
ADP released its November data on Dec. 3, which paints a bleak picture for the U.S. labor market, particularly in some areas of the country.
Private employers downsized their workforces in November.
Private-sector payrolls drop in the Northeast and South
Private employers cut 32,000 jobs in November, with construction, manufacturing, professional/business services, and information services leading the job losses, according to ADP numbers.
“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said ADP Chief Economist Nela Richardson. “And while November’s slowdown was broad-based, it was led by a pullback among small businesses.”
Related: Shocking September jobs report defies historical precedent
The declines were uneven across sectors and across regions.
While the construction and manufacturing industries saw job declines of 9,000 and 18,000, respectively, the natural resources and mining industry added 8,000 jobs.
Information services (20,000), financial activities (9,000), and professional/business services (26,000) lost jobs, while education/health services (33,000), leisure/hospitality (13,000), and trade/transportation/utilities (1,000) gained jobs during the month.
The job losses were also uneven by region.
The Northeast and South reported steep job losses, while the Midwest and West reported job gains.
New England employers laid off 50,000 people, while those in the Mid-Atlantic cut 49,000 jobs, and nearly 80,000 jobs were cut from the South Atlantic. Western companies added 67,000 jobs and the Midwest added 45,000 jobs.
All of the job losses reported by ADP came from small companies.
Establishments with between 1 and 19 employees reported 46,000 job losses, while those with 20 to 49 employees reported 74,000 layoffs.
The Federal Reserve watches job numbers closely
The Federal Reserve closely monitors the job numbers to fulfill its dual mandate of achieving full employment and maintaining stable inflation.
Last month, the White House announced that there likely won’t be an October BLS jobs report due to the government shutdown, making the data even more confusing going forward.
Related: Government layoff news is worse than expected
“Jobs numbers are notoriously volatile and subject to revisions (as we just saw for August and July),” said Todd Campbell, co-editor in chief of TheStreet. “The Fed will likely rely more on alternative private jobs insight for October and November. The volatility is why the Fed focuses more on the unemployment rate.”
The minutes from the latest Fed meeting in October show some disagreement over whether it should cut interest rates.
Fed Chair Jerome Powell said after the meeting that a December rate cut was not a “foregone conclusion.”
CNBC reported that market traders had been pricing in a near certainty for another rate cut in the December session. Still, that confidence fell to a 1 in 3 chance, according to the CME FedWatch measure of future pricing, after the minutes were released.