ADP Reports Private Sector Hiring Increased by Just 127,000 Jobs in November

The ADP Non-Farm Employment Change report showed on Wednesday that private sector employment rose by 127,000 in November. This reading came in lower than the market expectation of 190,000. The October reading was unchanged at 239,000.

In response to the data, Nela Richardson, chief economist at ADP said, “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.”

“In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing,” Richardson said.

Instant Analysis

The data supports the notion that the series of aggressive rate hike by the Federal Reserve are working to slow inflation and the labor market, leading investors to price in a 50 basis point rate hike by the Federal Reserve on December 15. This move would bring an end to the Fed’s streak of 75 basis point rate hikes.

Traders will now get the opportunity to react to another labor market report at 15:00 GMT. The JOLTS report is expected to show the number of job openings dropped from 10.72 million to 10.24 million.

At 18:30 GMT, Fed Chairman Jerome Powell is expected to give a speech on the economy and labor markets. Investors are hoping for further insight on the pace of future interest rate hikes and whether policymakers have a pivot strategy. Powell might also discuss the probability of a recession.

Market Reaction

U.S. Treasury yields dipped on the news, driving the U.S. Dollar lower. U.S. stock traders liked the news, adding to earlier gains in the pre-market session.