US private sector job growth slows in November

Hiring in the US private sector eased in November, as the post-pandemic boom in restaurant and hotel employment moderated, payroll firm ADP said Wednesday.

The slowdown in jobs creation is likely to be viewed favorably by policymakers at the US Federal Reserve, who are looking to cool the economy and cut inflation while avoiding a damaging recession.

Despite the Fed hiking interest rates to a 22-year high and holding them there, the labor market has remained remarkably resilient, although it has shown some signs of cooling in recent months.

Against this backdrop, there is widespread agreement among analysts and traders that the Fed will vote to hold rates steady at its interest rate decision next week, as it continues its fight against elevated inflation.

The US private sector added 103,000 jobs in November, according to the latest ADP report.

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This was lower than the 113,000 jobs created in October, and was sharply below the market expectation of 127,000 new jobs, according to Briefing.com.

"Restaurants and hotels were the biggest job creators during the post-pandemic recovery," ADP Chief Economist Nela Richardson said in a statement.

"But that boost is behind us, and the return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024," she added.

Meanwhile, annual private sector pay was up by 5.6 percent last month, ADP announced, down slightly from a month earlier.

"Overall, job growth remains positive," Rubeela Farooqi, chief US economist at High Frequency Economics, wrote in a note to clients.

But she noted that "the labor market is showing signs of cooling, with job openings moving lower and the unemployment rate edging higher."

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"We expect conditions in the labor market to loosen further, on the effects of restrictive monetary policy, which should weigh on demand and hiring going forward," she added.

Source: AFP