Just Ignore This Big ADP Miss, And Don’t Even Bother With The Internals, Ok?

In what’s either a bad omen or nothing to be particularly concerned about given ADP’s poor pandemic-era track record vis-à-vis “predicting” headline NFP prints, private sector employers added just 307,000 jobs last month.

That marked a considerable downside miss. Consensus was looking for 430,000.

The usual boilerplate copy will work: The disappointing number suggests the waning fiscal impulse and attendant D.C. gridlock is weighing on labor market momentum.

October was revised higher to 404,000.

The breakdown shows the services sector added 276,000 positions in November, with the bulk of the gains concentrated in leisure & hospitality and education & health. That’s good news for reasons that should be abundantly clear.

In the goods-producing sector, construction jobs were the standout, with 22,000 positions added. Manufacturing saw a more modest 8,000 gain.

Also notable is the concentration of gains in small- and mid-sized businesses. Firms with between 1 and 499 employees added 249,000 jobs in November, versus just 58,000 for large employers (i.e., those with 500 or more employees).

Between gains in leisure & hospitality and health & education, and the tilt towards smaller firms in terms of hiring, November’s ADP seems to strike the “right” chord, even as the headline print is a disappointment.

For what it’s worth, nobody appears to have taken the time to mention the outsized gains for small- and mid-sized businesses or cheer the clawing back of jobs in sectors that were hardest-hit. Instead, everyone is just focused on the fact that of the last half-dozen ADP reports, five of them have been lackluster versus expectations, while NFP has consistently posted big gains.

It’s never the nuance that matters — unless the nuance is negative. In which case everyone jumps all over it to generate web traffic using scary headlines.


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