On Wednesday at 21:15 GMT, the ADP employment figures for November, known as “small non-farm payrolls”, were released, and recorded a figure of 307,000, missing expectations, with the expected value of 410,000 and the previous value of 365,000 revised to 404,000. The ADP figure was the smallest increase since the job recovery began in May.
After the release of the data, spot gold was slightly higher by $2 in the short term before falling back. U.S. stock index futures were slightly higher, with Dow futures down 0.45% and S&P 500 futures and Nasdaq futures down 0.3%.
ADP reported that the pace of U.S. job growth continues to slow. The total number of new jobs created in October was revised to 404,000 from 365,000.
Detailed data at a glance
Specifically, employment growth by sector.
Employment in the manufacturing sector increased by 0.8 million in November and by 0.7 million in October.
Employment in the financial services industry increased by 0.8 million in November and by 0.6 million in October.
Trade/Transportation/Utilities employment increased by 31,000 in November, compared to an increase of 53,000 in October.
Construction employment increased by 22,000 in November and by 0.7 million in October.
Professional/business services employment increased by 55,000 in November, compared to an increase of 60,000 in October.
In addition, employment increased at both small and medium-sized businesses and large businesses, with medium-sized businesses posting the largest increase, adding 139,000 jobs. Large businesses added 58,000 jobs, while small businesses added 110,000.
How is the U.S. labor market doing?
This year’s global recession is very different from the 2008-09 crisis, in which the manufacturing sector fared worse than the service sector in a typical recession. But this year is different in that, within the constraints of maintaining social distance, the services sector collapsed more severely than the manufacturing sector and has not recovered as quickly.
Many manufacturing industries, moreover, are no longer as labor-intensive as they once were. The service sector can provide more jobs than manufacturing. However, it is now clear that the service sector is not doing well, and this is expected to slow the labor market recovery.
Michael Pierce, senior U.S. economist at Capital Economics, is concerned about stagnant job growth in the restaurant and leisure sectors, saying that November consumer surveys show that people are reluctant to spend time in restaurants and that high-frequency indicators such as OpenTable dinner numbers have deteriorated.
As of Nov. 27, U.S. hiring across all industries was down 11.6 percent this year compared to 2019. Hiring can be used to measure real-time labor market activity, which indicates that the current state of the U.S. labor market is still not encouraging. The industries directly affected by the new coronavirus experienced the largest declines in jobs compared to the past, such as the hospitality, travel and entertainment industry. The number of jobs in the travel and tourism industry declined by 47%.
After Wednesday’s release of small non-farm payrolls data, Friday night at 21:30, the U.S. November quarterly non-farm payrolls and the U.S. November unemployment rate will be released, which is expected to have a considerable impact on the market, so investors should pay attention.
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