Jobs will see solid gains in November and even construction will see a slight uptick, if the ADP predictions are correct.
ADP predicts an increase of 216,000 in total U.S. nonfarm private employment for November, a solid gain and up from this year’s average of 181,000 per month.
“For the month of November 2016 we saw very strong job growth that has almost doubled in gains over October 2016,” said Ahu Yildirmaz, vice president and head of the ADP Research Institute.
“This growth was seen in primarily consumer-driven industries like retail and, leisure and hospitality - across all company sizes,” Yildirmaz said. “Overall, consumers are feeling confident and are driving the strong performance we currently see in the job market.”
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(Source: ADP, Moody’s Analytics)
However, not everyone agreed with this prediction, and said that jobs will increase, but at a much lower rate than ADP predicts.
“Elsewhere, the 216,000 increase in the ADP measure of private payroll employment in November was well above the consensus forecast at 165,000, but October’s gain was revised down to only 119,000,” Capital Economics Chief Economist Paul Ashworth said. “November’s gains were almost exclusively in the services sector, with professional and business services employment increasing by 68,000.”
“The bigger than expected gain this month could raise expectations for the official non-farm payroll figures, due out this Friday, but we are content to stick with our existing estimate that the official employment tally increased by a slightly more modest 180,000,” Ashworth said.
Here is a breakdown of the sectors where the changes occurred:
The goods-producing sector decreased by 11,000 with changes in these areas:
Natural resources, mining: Decrease of 4,000
Construction: Increase of 2,000
Manufacturing: Decrease of 10,000
The service providing sector increased by 228,000 with increases in these areas:
Trade, transportation and utilities: Increase of 69,000
Information: Decrease of 10,000
Financial activities: Increase of 12,000
Professional, business services: Increase of 68,000
Education, health services: Increase of 43,000
Leisure, hospitality: Increase of 38,000
Other services: Increase of 8,000
Over the past three months, ADP's predictions came in lower than the final employment report. Last month, ADP predicted an increase of 147,000, which came in below the job report’s 161,000. Before that, the company predicted an increase of 154,000, just slightly lower than the employment report’s 156,000. In August the report’s 151,000 was further off from the prediction's 177,000.