The U.S. economy saw softening private-sector job creation last month, adding to evidence of a slowing labor market heading into December that could boost the case for a final Federal Reserve rate cut.
Payroll-processing group ADP said Wednesday around 146,000 jobs were created in the private sector last month, a decrease from the downwardly revised tally of 188,000 in October.
Economists had expected ADP's National Employment Report to show gains of around 166,000 as hiring slowed into the middle of the fourth quarter
Investors are also likely to focus on wage and earnings details provided in the ADP release, which showed a year-on-year increase of 4.8% for so-called job stayers. That's the first increase in more than two years for those workers who remained in their positions.
Those seeking new roles saw pay gains of 7.2%, the lowest wage premium for changing jobs in more than three years.
“While overall growth for the month was healthy, industry performance was mixed,” said ADP's chief economist, Nela Richardson. “Manufacturing was the weakest we've seen since spring. Financial services and leisure and hospitality were also soft.”
Earlier this week, data from the Bureau of Labor Statistics showed that October job openings rose to around 7.7 million position while the so-called quits rate edged higher, to 2.1%. The report suggested workers are still finding higher-paying roles even amid a broader slowdown in hiring.
Stock futures added to gains in the wake of the ADP release, with the S&P 500 called 18 points higher and the Nasdaq set for a 150-point advance at the start of trading. The Dow is priced for a 165-point gain.
Benchmark 10-year Treasury note yields held steady at 4.271% following the release, while 2-year notes were last pegged at 4.2% following their biggest two-day pullback of the year.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.2% higher 106.58.
More Economic Analysis:
- Trump Trade puts stocks at record. Where do we go from here?
- Fed inflation gauge higher in October amid consumer spending boost
- Goldman Sachs analyst sees starting point for year-end S&P 500 rally
CME Group's FedWatch pegs the odds of a December rate cut at around 74%, but puts the chances of a follow-on move in January at just 17.4%.
The Labor Department will publish its benchmark November nonfarm-payrolls report Friday, with investors looking for a hiring gain of around 202,000 hires in November and a headline unemployment rate around 4.2%.
Related: Veteran fund manager sees world of pain coming for stocks
