Private payrolls grew by 534,000 in November: ADP

Yahoo Finance's Emily McCormick details the latest information included in ADP's November jobs report, including private payrolls growing by 534,000 and notable jobs growth in the leisure-hospitality sector.

Video transcript

JULIE HYMAN: I want to turn to economic data that we got this morning, because the drumbeat is beginning to the jobs report on Friday. And of course, as usual, the first sort of piece of that puzzle is the ADP report, which was out earlier this morning. There's not a direct correlation, right? But directionally, perhaps it's a good sign for that jobs report on Friday. Our Emily McCormick is looking at all of the numbers from that report. Emily, good morning.

EMILY MCCORMICK: Good morning, Julie. And this morning, we did get a good directional sign on the trajectory of the labor market's recovery out from ADP. That institution reporting that the private sector saw a bigger-than-expected jump in employment last month, with private payrolls growing by 534,000 in November compared to October, whereas consensus economists were looking for private payrolls to rise by 525,000.

Now, we also saw that private payrolls had risen by 570,000 in October. So November did mark a third-straight month of net payroll gains north of half a million. But taking a look by sector in this morning's report, pretty broad gains across industries. But the biggest improvements were still concentrated in the service sector.

Now, we saw the service sector add back 424,000 payrolls last month, which was in turn led by leisure and hospitality employers with about 136,000 jobs added back on net. Then in the goods producing sector, we did also see manufacturing and construction employers see job growth of at least 50,000 during the month.

So this report is just one more positive data point on the labor market heading into Friday's government jobs report. We also saw that weekly jobless claims came in at a 52-year low last week during the BLS jobs report survey week. So really a plethora of positive labor market data out recently.

Now, as you were mentioning, ADP's print does not always serve as a perfect indicator of what to expect from this government report. But if we take a look at what consensus economists are looking for at this point, payrolls are likely to come in pretty close to what we got from ADP based on that consensus estimate, which currently stands at about 548,000 non-farm payrolls with an unemployment rate improving by 0.1 percentage points to reach 4.5%.

So we'll see how that Friday jobs report turns out. We will get another weekly jobless claims report out tomorrow morning as well. But at least for this morning, a slightly-better-than-expected printout from ADP. Guys.

JULIE HYMAN: Yep, and we're really looking forward to that number on Friday, as are market participants. Thank you, Emily. Appreciate it.