ADP Employment: Another Month of Solid Gains

Bottom Line:   ADP reported stronger than expected job gains in November for the third month in a row with gains across sectors. Leisure and hospitality led the gains, as has been typical. Construction and manufacturing hiring rose sharply, despite reports of skilled labor shortages. On a trend basis, this report shows steady job creation with the three-months ended in November running at 543k, above the six-month pace of 500k and the 12-month pace of 444k.  Moreover, this report suggests a slight upside risk to the consensus forecast of 548k for nonfarm payroll growth on Friday.ADP National Employment ROSE by 534k in November, compared with the consensus estimate for a gain of 525k. Meanwhile, the revisions to the prior 3 months added an additional 2k to the previous estimate. Over the past 12 months, private payrolls have increased by an average of 444k per month, lifting employment to 4.5% ABOVE its year-ago level.

Jobs in Goods-Producing Industries ROSE by 110k jobs as Manufacturing gained 50k workers. Moreover, Construction gained 52k jobs.  Service-Producing Industries ROSE by 424k jobs with Professional/Business Services hiring 110k workers, Trade/Transport/Utilities adding 78k, and Financial Activitiesincreasing by 13k workers.Small Firms hired 115k workers, Medium-Sized Firms grew by 142k employees while Large Firms added 277k positions.