US companies added just 127,000 jobs in November as hiring slows

Economists expected private payrolls to grow by 200,000 in October

Private payroll job growth slowed sharply in November, evidence that the historically hot labor market is finally starting to cool off, according to the ADP National Employment Report released Wednesday morning. 

Companies added just 127,000 jobs last month, missing the 200,000 gain that economists surveyed by Refinitiv had predicted.  

The weaker-than-expected report comes as the Federal Reserve wages the most aggressive fight since the 1980s to crush inflation and slow the labor market with a series of rapid interest rate increases. 

"Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains," said Nela Richardson, chief economist at ADP. "In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing."


Jobs hiring

A large "Now Hiring" posting on the windows of the Advance Auto Parts store in Bay Shore, New York on March 24, 2022. (Steve Pfost/Newsday RM via / Getty Images)

The bulk of the gains in November stemmed from the leisure and hospitality industry, which added 224,000 new workers. Trade, transportation and utilities followed with 62,000 hires, trailed by education and health services with an increase of 55,000.

The biggest losses, meanwhile, were in the manufacturing industry, which saw payrolls decline by 100,000. Professional and business services lost 77,000 jobs, and financial activities shed 34,000.

By size, only medium businesses that employ between 50-499 workers that job gains last month, with an increase of 246,000. Large firms lost 68,000 workers, while small businesses, which have struggled the most with the worst inflation in four decades, shed 51,000 workers. 


Despite the lackluster job growth in November, the labor market saw another month of robust pay increases, according to the report, which is now conducted alongside Stanford Digital Economy Lab. Wages climbed 7.6% in November, a slightly slower pace than the 7.7% recorded in October – a concerning development as consumers continue to confront high inflation.

The data precedes the release of the more closely watched November jobs report on Friday morning, which is expected to show that employers hired 200,000 workers following a gain of 261,000 in October. The unemployment rate is expected to hold steady at 3.7%.