In a report released by the Automatic Data Processing company (ADP) on Wednesday, December 3, it was revealed that in November, the private sector in the United States lost 32,000 jobs, primarily due to a decrease in employment in small businesses.
Amid increasing concerns about the US job market, the latest data from ADP, a payroll processing company, indicates that the situation is worse than expected.
The data from ADP shows that in November, although larger companies with 50 employees or more actually added a net of 90,000 employees, businesses with fewer than 50 employees cut 120,000 positions, with those in the 20 to 49 employee range decreasing by 74,000. This overall job loss marks the largest decline since March 2023.
The education and healthcare services industries fared the best, adding 33,000 job positions in November; the leisure and hospitality industry also saw an increase of 13,000 employees. However, due to widespread declines in job positions across industries, overall employment numbers still decreased.
The professional and business services sector suffered the most, losing 26,000 positions. Other industries experiencing a decrease in employees include information services (down 20,000 positions), manufacturing (down 18,000 positions), financial activities, and construction (each down 9,000 positions).
Wage growth also slowed down, with workers remaining in their current positions seeing a 4.4% increase in wages compared to the same period last year, a 0.1 percentage point decrease from October.
Revised data from ADP indicates a rise of approximately 47,000 in private sector employment in October in the United States. This is an improvement from the previous two months, as employment figures declined in August and September.
The ADP report suggests that small businesses seemed to be struggling in November. According to government data, approximately 46% of all employees in private US businesses work for small businesses.
ADP’s Chief Economist Nela Richardson stated in a release, “Hiring has been volatile as employers navigate cautious consumer behavior and an uncertain macroeconomic environment. While the slowdown in November was broad-based, it was primarily driven by small businesses downsizing.”
During a conference call with reporters, Richardson further commented, “The possible scenario is that small businesses will maintain lower employee levels for a period until we get through some stages of inflation and rising prices, until we have more certainty about the macro environment.”