--ADP says private payrolls rose 118,000 in November
--Sandy estimated to have reduced jobs by 86,000
--Early Thanksgiving said to have increased retail hiring
--Underlying pace of job creation is about 150,000, chief
economist of Moody's Analytics says
By Kathleen Madigan
Private-sector hiring slowed in November but the top-line number
masks crosscurrents that hit the job markets last month, according
to an Automatic Data Processing Inc. (ADP) tally of hiring released
Wednesday.
Private-sector jobs in the U.S. increased 118,000 last month,
according to a national employment report calculated by payroll
processor ADP and forecasting firm Moody's Analytics. The October
job gain was revised slightly to 157,000 from the 158,000 reported
a month ago. Economists expected a 125,000-job gain.
Two special factors skewed the top-line numbers, said Mark
Zandi, chief economist of Moody's Analytics, which compiles the ADP
data.
First was superstorm Sandy. Many businesses in the Northeast are
still struggling with the damage caused by Sandy, which made U.S.
landfall on Oct. 29.
"Superstorm Sandy wreaked havoc on the job market in November,
slicing an estimated 86,000 jobs from payrolls," said Mr. Zandi.
The impact showed up in manufacturing, retailing, leisure and
hospitality, and temporary help jobs.
On the plus side, jobs were boosted by the early Thanksgiving,
he said. Retailers added holiday temp help earlier than in past
years, which probably added between 60,000 and 70,000 jobs to the
total.
Excluding the storm and calendar, the underlying pace of hiring
was about 150,000, Mr. Zandi, "just above what's needed to bring
down the unemployment rate."
According to ADP, firms employing between one to 49 workers
increased jobs by 19,000 in November. Medium-sized businesses with
payrolls of 50 to 499 workers hired 33,000 new employees. Among
large firms, businesses with 500 or more employees added 66,000
positions.
Service-sector jobs increased by 114,000 last month, but factory
jobs lost 16,000 slots. Mr. Zandi said Sandy reduced manufacturing
payrolls but the sector would have posted a loss even without the
storm.
Starting with the October report, ADP made major changes to its
payroll survey. ADP says the new methodology is geared toward
capturing where the widely watched nonfarm payrolls count will be
revised to, not necessarily the initial reading of jobs as reported
by the Bureau of Labor Statistics on the first Friday of almost
every month.
The ADP survey tallies only private-sector jobs. The BLS's
nonfarm payroll data, to be released Friday, include government
workers.
Economists surveyed expect total nonfarm payrolls increased by
only 80,000 in November, as the net job gain was held down by
losses in areas hit by Sandy.
Last month's jobless rate is projected to hold at 7.9%.
Because the revised ADP methodology is new and because of the
unknown impact from Sandy, most economists are unlikely to change
their estimates for Friday's jobs number.
ADP, of Roseland, N.J., offers payroll processing, human
resource and benefit administration services to about 600,000
clients worldwide. Economics firm Moody's Analytics is a subsidiary
of Moody's Corp. (MCO).
A stronger view of November payrolls was also released
Wednesday.
TrimTabs Investment Research said the total U.S. economy added
202,000 new jobs last month. The report said rebuilding from Sandy
may be lifting employment.
TrimTabs's employment estimates are based on an analysis of
daily income tax deposits to the U.S. Treasury from all salaried
U.S. employees.
Write to Kathleen Madigan at kathleen.madigan@dowjones.com