“Today’s number would have easily been over 200,000 (jobs) if not for the impact of the hurricane across a wide array of industries,” said Mark Zandi, chief economist for Moody’s Analytics, which co-authors the monthly report with ADP. “On the flip side, 200,000 is a pretty big number, considering it’s higher than the job growth we’ve been getting over the recovery.”
According to Zandi, Hurricane Sandy cost the U.S. private-sector economy 86,000 jobs in November, mostly on the small-business side, as companies with fewer than 50 employees “were more likely not to have the financial resources to pay their workers for the week of the storm, whereas for big companies — even if their workers didn’t work that week — their workers probably did get paid. And if you get paid, then you get counted in the employment data.”
Zandi said storm-related job losses more than offset the roughly 65,000 jobs businesses added in response to an earlier Thanksgiving — or kickoff to Christmas shopping — compared to past years. But that holiday job boost will “come out of the December number” with seasonal adjustment, Zandi said, which suggests next month’s ADP jobs data also will be on the soft side.
Though companies continue to exhibit angst regarding looming tax increases and steep spending cuts at the national level, Zandi said he doesn’t sense from any employment data that “businesses have pulled back on hiring or increased layoffs around fiscal uncertainty. But they have pulled back on investment and advertising, since it’s easy for a CEO of a company to delay an investment purchase … and going to the human resources head is more difficult.”
“We’re facing more like a bunny slope than a (fiscal) cliff in the early part of January, and I don’t think businesses will respond to that,” Zandi said. “If (Washington) won’t get it together going into February, then I think we’d see some big impact in the February data. Businesses wouldn’t increase layoffs until they saw demand declined, but they would stop hiring.”
The modest payroll increase was driven by corporations with more than 1,000 employees, which added 62,000 jobs in November, according to the ADP report. Small businesses added 19,000 jobs last month.
According to the report, the construction and utilities sectors added a combined 45,000 jobs, while the manufacturing sector shed 16,000 jobs. Zandi said manufacturing employment would have declined last month regardless of Hurricane Sandy, but the decrease would have been smaller.