Hiring at U.S. businesses slowed to 118,000 new jobs in November, according to a monthly report by private payroll processor Automatic Data Processing (ADP) Wednesday morning. The results were in line or just shy of economist expectations.
In October ADP estimated that 158,000 private-sector jobs were added, a mild revision from the original 157,000 originally reported. The decrease in November is reflective of Hurricane Sandy hitting the East Coast late in October as well as caution amongst businesses to invest in more employees until lawmakers in Washington find some resolve to avert the so-called “fiscal cliff.”
ADP said that superstorm Sandy cost “an estimated 86,000 jobs from payrolls.”
23,000 construction jobs were created in November, counterbalancing losses of 16,000 jobs in manufacturing. The majority of new jobs came from large business, which created 66,000 new positions. Small businesses only chipped-in with 19,000 new jobs.
This was the second month of reporting under new algorithms and a larger sample from ADP with its new partner, forecasting firm Moody’s Analytics, a subsidiary of Moody’s Corp. (MCO). The new pact was established for ADP to try and better predict revisions in nonfarm payrolls, more succinctly, the second revision that is released two months later. The Labor Department announces its initial estimate two days after the ADP report and then subsequently revises those figures over the next two monthly reports.
The ADP report has been previously criticized as not being an accurate reflection of the jobs situation in the nation compared to the government report, arguably one of the most critical pieces of economic data reported each month. The re-vamp of methodology and partnership with Moody’s is meant to correct that so ADP’s report serves as a valuable precursor to the Labor Department’s revisions.
Economists are expecting that the stats from Washington on Friday will show the unemployment rate held at 7.9 percent and that the economy created 80,000 new jobs in November.