U.S. businesses hired at a solid pace last month, according to a private survey, a signal that Friday's November jobs report from the government will likely also show strength.
Payroll processer ADP said Wednesday that companies added 208,000 jobs in November, the third straight month that hiring has topped 200,000. The figures suggest that businesses remain confident enough in the economy and their customer demand to add workers despite sluggish growth overseas.
October gains were revised up slightly to 233,000 from an initially reported 230,000," Barclays Research economist Jesse Hurwutz wrote in an e-mailed analysis. "Goods-producing employers added 32,000 employees (previous: 46,000), split about evenly between construction and manufacturing...The significant revisions to the ADP employment report limit its usefulness in forecasting; however, we view the slight deceleration in private payroll growth from October as broadly in line with our outlook for private nonfarm payroll growth of 190,000 in Friday’s employment report from the Labor Department."
The ADP numbers cover only private businesses and sometimes diverge from the government's more comprehensive jobs report, which includes government agencies.
Economists have forecast that the government's figures will show that employers added 225,000 jobs in November, according to a survey by financial data provider FactSet. The unemployment rate is expected to decline to 5.7 percent from 5.8 percent.
The job gains in the ADP survey were broadly distributed: Construction companies added 17,000, manufacturers 11,000. A category that includes retail, transportation and utility companies gained a robust 49,000 jobs, possibly reflecting hiring ahead of the holiday shopping season.
Strong economic growth has encouraged more companies to step up hiring. The economy expanded at an annual pace of 4.3 percent from April through September, the healthiest six-month rate in 11 years.
So far this year, employers have added an average 229,000 jobs a month, up from an average of 194,000 in 2013. This year's monthly average is on track to be the highest in 15 years.
But that trend has yet to spur significant wage gains. Average hourly wages have risen 2 percent in the past year — barely above inflation and below the 3.5 percent annual increases typical of an economy at full health.
The sluggish pay increases have likely held back consumer spending, which rose only modestly in October. The holiday shopping season is also off to a slow start, raising concerns that economic growth could weaken in the final three months of this year. Many economists forecast that growth will slide to a 2.5 percent annual rate in the current October-December quarter.