Two jobs reports released Wednesday show that U.S. companies in November hired at a rate nearly twice as fast as the rate at which they fired workers. Private-sector employment increased by 93,000 in the month, according to the latest ADP National Employment Report, while planned job cuts surged to an eight-month high totaling 48,711 in November, global outplacement consultancy Challenger, Gray & Christmas reported.
The ADP report showed that the 93,000 private-sector employment increase came from 54,000 small-business jobs, 37,000 medium-business jobs and 2,000 large-business jobs. Of those, 79,000 jobs were in the service-providing sector and 14,000 were in the goods-producing sector. Analysts’ consensus was for a 70,000 jobs increase.
However, the Challenger report showed that the 48,711 job cuts in November were 28% higher than the 37,986 planned layoffs reported in October. It was the highest job-cut total since March, when employers announced plans to cut 67,611.
“This is the biggest increase in ADP employment since November 2007, and there's a clue to the problem,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics Ltd., in Valhalla, New York, in an analyst note on Wednesday.
“This is now the fifth year in the past six in which the November reading has been notably stronger than in the previous few months,” Shepherdson explained. “That does not mean we can be absolutely sure today's good-looking number is affected by favorable seasonal quirks—after all the October number was 82,000, not much different—but we are skeptical. We do think core private payroll growth will gradually accelerate over the next few months but we are reluctant to get too excited about this number.”
Shepherdson noted that the U.S. Department of Labor will release its jobs report this Friday, and he predicted that it won’t paint a positive picture of where hiring is headed. “We are sticking to our view that Friday's official payroll number will be on the disappointing side of consensus,” he said.
On Tuesday, Federal Reserve Chairman Ben Bernanke spoke in Columbus, Ohio, about the nation’s job troubles, saying that the current 9.6% unemployment rate stands pretty much where it stood during the recent recession.
“At the pace of growth that we’re seeing now, we’re not growing fast enough to materially reduce the unemployment rate,” he said.
Read about the Labor Department’s U.S. jobs report for October at AdvisorOne.com.