The U.S. economy added 127,000 new jobs in November, according to the latest numbers from payroll processing firm ADP. This marks a rapid slow down in hiring from October, when employers added 239,000 positions. It's also well below the Dow Jones estimate of 190,000 new jobs.
What's behind this long-awaited (and long-feared for many) slackening in the labor market? ADP blames the Federal Reserve's recent rate hikes.
"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 finally catching up with the labor shortages that took hold during the pandemic. "Fewer people are quitting, and the post-pandemic recovery is stabilizing," Richardson said.
The breakdown of hirings by industry also hints at another shift in the economy: While employment in services continues to grow, goods producers actually laid off more people than they hired.
Overall, goods producers lost 86,000 jobs, with manufacturers cutting 100,000 positions, and construction companies laying off 2,000 workers. Only natural resources and mining saw net gains with 16,000 new jobs.
Service-providers added 213,000 positions, but leisure and hospitality was responsible for the bulk of that hiring, adding 224,000 positions in November. Professional and business services, meanwhile, lost 77,000 jobs; financial activities lost 34,000, and information knocked off 25,000.
For those still with a job, however, wages continued to grow.
So-called job-stayers (workers who haven't changed jobs this year) saw their pay increase 7.6 percent in November from 12 months before. As for job-changers, their pay was up 15.1 percent from a year ago.
While these numbers remain historically high, they mark a gradual slow down from the rapid wage gains of earlier in the pandemic.
"Job changers notched their fifth straight slowdown and the smallest increase in pay since January," ADP wrote in a news release. "Pay growth for job stayers edged down, too, led by leisure and hospitality, which had a rapid run-up in 2021 but has been falling since March."
The release of the jobs data coincides with yet another round of layoffs from major corporations — this time, from a tech firm and a retailer.
DoorDash on Wednesday announced plans to cut 1,200 corporate jobs, citing the need to lower operational costs around staffing.
“Most of our investments are paying off, and while we’ve always been disciplined in how we have managed our business and operational metrics, we were not as rigorous as we should have been in managing our team growth," said CEO Tony Xu in a message to employees. "That’s on me."
Fast-fashion retailer H&M also announced that it will be reducing its workforce by 1,500 positions in a bid to increase efficiency amid softening consumer demand and persistent inflation.
“The cost and efficiency programme that we have initiated involves reviewing our organization and we are very mindful of the fact that colleagues will be affected by this," said CEO Helena Helmersson.