The ADP national employment report puts payroll gains at 103,000 in November after a small downward revision to 106,000 in October. The gain is below the consensus of up 123,000 in the Econoday survey of forecasters. The increase in November private payrolls was mixed and could still reflect some of the disruptions in strike activity that was only recently resolved.

In November, private payrolls for goods-producers are down 14,000. While hiring in natural resources/mining is up 5,000, construction payrolls are down 4,000 and manufacturing off 15,000. Construction typically slows as wintery weather arrives, but this year the decline is more likely the result of restructuring in residential construction as financing costs for new building, renovations, and repairs are up substantially. Manufacturing payrolls may also be seeing the usual slower period toward year end, but also reshaping after the UAW strike largely concluded at the end of October.

Pay growth for job-stayers was 5.6 percent in November, the lowest since September 2021. The increase for job-changers is up 8.3 percent year-over-year, the lowest since 8.1 percent in June 2021. Higher compensation remains a motivation for looking for a new job situation, but the moderation means less churn for the labor market.

Service-providers' payrolls are up 117,000 in November, mainly due to a hefty gain of 55,000 in trade/transportation/utilities and 44,000 in education/health services. For the former, businesses are probably adding to payrolls to service the winter holiday shopping period in the retail sector both online and brick-and-mortar and for delivery services as online shopping's popularity has not diminished.

Payroll increases are largest for mid-sized companies (50-499 workers) with an increase of 68,000. Small businesses (1-49 workers) are also filling some jobs, as are larger companies (500+ workers) with an increase of 33,000.

Forecasters see ADP's November employment number rising 123,000. This would compare with October growth in private payrolls reported by the Bureau of Labor Statistics of 99,000, much lower than 246,000 in September. ADP's number for October was 113,000.

The national employment report from Automated Data Processing Inc. is computed from ADP payroll data and offers advance indications on the U.S. workforce. ADP's data cover more than 500,000 companies totaling more than 25 million employees. The report is produced by ADP Research Institute in collaboration with Stanford Digital Economy Lab.

Market players have become accustomed to the excitement on employment Friday and realize the rich detail of the monthly employment situation can help set the tone for the entire month. While economists have improved their nonfarm payroll forecasts over the years, it is not unusual to see surprises on employment Friday. To that end, the ADP's national employment report can help improve the payroll forecast by providing information in advance of the employment report.

The employment statistics also provide insight on wage trends, and wage inflation is high on the list of enemies for the Federal Reserve. Fed officials constantly monitor this data watching for even the smallest signs of potential inflationary pressures, even when economic conditions are soggy. If inflation is under control, it is easier for the Fed to maintain a more accommodative monetary policy. If inflation is a problem, the Fed is limited in providing economic stimulus.

By tracking jobs, investors can sense the degree of tightness in the job market. If wage inflation threatens, it's a good bet that interest rates will rise; bond and stock prices will fall. No doubt that the only investors in a good mood will be the ones who watched the employment report and adjusted their portfolios to anticipate these events. In contrast, when job growth is slow or negative, then interest rates are likely to decline - boosting up bond and stock prices in the process.