U.S. private sector employers added back fewer jobs than expected in November, with the coronavirus pandemic still exerting pressure on the labor market even as optimism over a vaccine and broader economic reopening come into view.
Private payrolls increased by 307,000 in November, according to ADP’s closely watched monthly jobs report. This marked the seventh straight month of net payrolls gains after the coronavirus pandemic spurred historic job losses in March and April. Private-sector jobs rose by an upwardly revised 404,000 in October.
The print, however, missed estimates. Consensus economists had been looking for private payrolls to rise by 440,000 in November, according to Bloomberg data.
By sector, service-providing industries again added back the greatest number of jobs, as the pockets of the economy hardest hit early on by the pandemic recovered. Leisure and hospitality payrolls increased by 95,000, or the most of any industry, though these gains slowed relative to those made in October. Education and health services, as well as professional and business services employers also each added back tens of thousands of jobs.
Goods-producing jobs rose by 31,000, accelerating from October. Construction industries led the jump with a rise of 22,000 positions, though mining and manufacturing jobs also rose on net.
ADP’s report comes as other incoming data has pointed to some backsliding in the labor market’s recovering. Weekly jobless claims rose in each of the past two weeks, following a month’s worth of improvements. And the number of individuals considered “permanent job losers” in the Labor Department’s October jobs report overtook the number of those on temporary layoff for the first time since the coronavirus crisis began, underscoring the threat of long-term damage to the labor market.
As coronavirus cases hit record numbers in the U.S. during November, new stay-in-place restrictions swept the nation. Amid these, more companies have recently disclosed plans for more job reductions: Disney (DIS) said last week it would lay off 4,000 more workers than previously announced mostly at its theme parks, and Goldman Sachs (GS) is reportedly pursuing an additional round of job cuts in a bid to consolidate costs. And with travel demand still weak and no additional government aid assured, Southwest (LUV) has warned some 2,000 employees their jobs could be in jeopardy as soon as January, which would mark the first layoffs in the airline’s history.
Still, prospects of an effective COVID-19 inoculation also improved significantly in November, with Pfizer (PFE), Moderna (MRNA) and AstraZeneca (AZN) each reporting promising efficacy data for their candidates. However, the vaccines will likely not be available en masse until the middle of 2021, leaving businesses months to endure the ongoing pandemic.
“With a vaccine finally in sight, life may begin to return to normal by next summer,” Wells Fargo economist Sam Bullard said in a recent note. “However, with new COVID cases elevated headed into the holiday season, and with many states imposing new restrictions on private activity, the next few months could be an especially tough stretch for the economy.”
ADP’s report comes two days before the U.S. Department of Labor’s (DOL) monthly report on non-farm payrolls, which is used as the “official” gauge of employment gains and losses in the U.S. As of Wednesday morning, the DOL report was expected to report an increase of 560,000 private payrolls for November.
—
Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
Read more from Emily:
Some wellness products growing ‘over 1,000%’ during pandemic: Ro CEO
What we can learn from the 17 stock market crashes since 1870
Find live stock market quotes and the latest business and finance news
For tutorials and information on investing and trading stocks, check out Cashay
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and reddit.