Greetings, and welcome to the ADP National Employment Report Media Conference Call. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the four on your telephone. If at any time during the conference you need to reach an operator, please press star 0. As a reminder, this conference is being recorded on Wednesday, December 1, 2021. I would now like to turn the conference over to Joanna DiNizio. Please go ahead.
Good morning and welcome to the November 2021 ADP National Employment Report Media Conference Call. With us is Nela Richardson, Chief Economist at ADP. Nela will share her thoughts on the November findings, which is derived from ADP's actual data of those who are on a company's payroll and produced in collaboration with Moody's Analytics. She'll take as many of your questions as possible before our hard stop at 9 A.M. Nela, please go ahead.
Okay. Thank you, Joanna. Good morning, everybody. Well, as we saw in this month's report, the labor market posted a second month of solid gains. In November, private sector payrolls rose by 534,000 on our net. That brings the three-month average to 543,000. This is a small uptick from the 478,000 job pace in the first nine months of the year, and we view that as positive. Job gains have eclipsed 15 million since the recovery began, though we're still about 5 million jobs short of where we were pre-pandemic. Job gains have been impressive now for three straight months since the Delta and the summer slowdown. There's good signs for gains to continue. Among those are initial claims for employment insurance, which are back closer to historic lows.
There's job openings that are plentiful, hovering currently around record highs. The share of workers quitting can be regarded as a good signal. Generally, we see higher quit rates when there are more plentiful job opportunities. Certainly, if you look at job openings, that's the case now. It's too early to tell the impact of Omicron on the labor market, but the risk will be driven by consumer behavior, how comfortable they are with the risk, potential risks of a new variant, what those concerns will be. It'll also depend on whether and how long borders are closed, and also whether this new variant leads to any strains on supply. Those strains on supply currently don't seem to be affecting the goods market.
We've seen, if you look at the sector breakdown, solid gains from goods producers, which added 110,000 jobs in November, nearly double the pace so far this year. Service providers continued to count for the majority of gains, picking up 424,000 jobs. That's about in line with the average so far this year. Just looking a little bit deeper into that goods-producing sector, construction payrolls remained strong, adding 162,000 jobs. That matches last month's reading and is more than double the average pace of growth through the first nine months. Natural resources has been slower. Payrolls were up 7,000 in November, averaging 5,000 this year. We think that the long-term outlook for this sector is going to be limiting hiring in the near term.
Turning to manufacturing, payrolls were up again, adding 50,000 jobs after averaging only 26,000 so far this year. Manufacturing is powering through the supply chain and labor supply issues. Even though we're seeing a slowdown in supplier deliveries that could impede production, hiring remains solid. Now, it goes without saying that the standout of this recovery is the service sector. Again, noting that services hiring was 424,000 in November. Leisure and hospitality was the fastest-growing industry again, though its lead is narrowing from recent months. It added 136,000 in November, and that's actually below the near 200,000 job pace in the first 10 months of the year. The massive restaurant and bar industry will continue to provide a significant tailwind as these businesses normalize.
However, firms are still struggling to find workers in this sector. The sector is also quite vulnerable if there is a resurgence of the pandemic. We're watching that. Professional business services continued to provide steady increases. Gains totaled 110,000 in November. This is the strongest read since mid-2020. There's been a composition shift in this sector. We're seeing more gains in administrative and support services, and that's likely a result of a renewed push in getting some workers back into the office by the end of the year. Gains in education and healthcare remained solid, though slower than earlier this year, posting 55,000 in November, but lagging the 70,000 average pace. Just a couple more industries to note.
The recovery in trade, it added, 78,000 in November. That's good news. E-commerce has been a boon to transportation and warehousing, even as retailers and brick-and-mortar stores are still having to kind of deal with that stealing of market share from e-commerce. Financial services, which was the least impacted sector by the pandemic, is averaging 12,000 over the last nine months and pulled in 13,000 jobs in November. Again, when we look at firm size, growth in November was weighted heavily towards large companies. Firms with more than 1,000 workers were ahead of the pack, adding 234,000 jobs. The average gain for large companies is now 286,000 over the last three months. That's compared to 119,000 in the first eight months of the year.
We've seen a large firm outperformance be a pattern for the past three months. Mid-sized companies added 142,000 jobs. Smaller companies added 115,000 jobs. We did see some good news with firms less than 50 employees. They've rebounded nicely after facing some struggles late in the summer due to, in large part, the Delta variant. Small companies, though, in relation to the large company outperformance, we've seen they've been less well-equipped to compete on wages and benefits as labor shortages continue to limit hiring. Those are the numbers. Overall, a solid report with some good potential for seeing some continued gains in the last part of this year. With that, I'll turn it back to Joanna for your questions.
Thank you, Nela. Operator, we are ready for questions.
Thank you. If you would like to register a question, please press the one four on your telephone. You will hear a three-tone prompt to acknowledge your request. If your question has been answered and you would like to withdraw your registration, please press the one followed by the three. Once again, to register a question, please press the one four on your telephone keypad. One moment please for the first question. Our first question comes from Gregory Robb with MarketWatch. Please proceed.
Hi. Thanks for doing this call. Appreciate it. I was wondering if you could talk a little bit more about the 5 million job shortage and what your thought is on that. I mean, I guess everybody has their own theories about that. I guess that number isn't in the report, like the total, the job totals. I guess it would be nice to have those numbers so we could talk about it some more. Thank you.
Sure, thank you for your question. The 5 million job shortage is something that we note that, you know, we've seen a remarkable downshift in the unemployment rate. You think in the Great Recession, the unemployment rate stayed above 8% for almost three years. Here, less than two years into the jobs recovery, we've seen a remarkable downshift. That being said, that rate doesn't include 5 million people who are still sidelined from the pandemic. The reasons, I think, are unique. They're varied, and that's why it's hard to generalize why people aren't going back to work. Some of the bottlenecks that we talked about this summer have receded quite a bit. Those bottlenecks included expansive and generous unemployment benefits. Those have all faded away as of September.
We talked about limitations in terms of schools being out of session and daycare being harder and more expensive to find. Now, those bottlenecks are still present. Schools have reopened and they're in person, but as we've noted, they're not as predictable as they used to be before the pandemic. And also there are still shortages in terms of bus drivers. We just put out a report this week talking about the bus driver shortage that's been well documented in media as well as there's been some concerns with childcare. We're down about 10% in terms of childcare workers, so that's a meaningful restriction. Then there's concerns about the pandemic itself.
Even if people are vaccinated, there might be family members who are not or who are vulnerable, and that's limited, I think, some participation in the jobs market. Then finally, we can't exclude the context of the remarkable stock market and home price growth that we've seen over the past several months. That's added equity, home equity. Real money has been made in 401(k) plans. Stock prices continue to reach new highs. That's given some higher income people options. We were already facing a large share of the boomer workforce retiring pre-pandemic, and now they're in a better position, frankly, many of them, to pull forward that retirement decision and retire early.
There's a whole host of reasons why 5 million people are not in the workforce right now. I also think that there is a skills mismatch between the jobs that are attractive enough to lure people back and the jobs that are being offered. Many of them are still low-paid service sector jobs. The mismatch in opportunities could also be hampering hiring.
Thank you.
Sure.
As a reminder, to register a question, please press the one four on your telephone. Our next question comes from Annalyn Censky with CNN. Please proceed.
Hi. Good morning. Hi. Good morning, Nela. I have to ask you a crystal ball question because I think this report today and the jobs report from the government on Friday is gonna be overshadowed a little bit by all the madness and worry about the new variant and whether it may or may not be like Delta and kind of put a bit of a pause on the recovery both in the economy and the job market, which is obviously something that you know. I was wondering how you're thinking about the occurrence of new variants and sort of the hurdles that the jobs recovery might encounter in the future.
I think this does link as well to the people who are already not in the labor market and how it might actually keep them out of it for even longer. I would love it if you could comment on that.
Sure. Well, we have in terms of the crystal ball. I've been joking that it's on backorder because of the supply shortage. We actually luckily or maybe not so luckily have a recent example of what happened when the variant gained increased COVID cases, and that was this summer. We saw in a very real way a slowdown in hiring as a result of the Delta variant. Consumers actually pulled back. There were fewer people going to restaurants, fewer people traveling, and that had an impact on hiring, likely had an impact on fewer people deciding to come back into the labor market. We also found out that things weren't as bad as initially reported in government statistics.
Hiring was revised by 235,000 in two months in late summer, so revised up, which was great news to see. When it comes to the new variant, I think its impact will depend on a whole host of scenarios that it right now is impossible to tell. One thing we know about the pandemic is to expect the unexpected. There's a large degree of uncertainty about the path of any variant. It's hard to be decisive here.
What we can say is that in terms of the health conditions on the ground, we as a country are in a much better position than we were December of last year when the case counts were skyrocketing and poised to go higher in January and many fewer people were vaccinated. Now even young kids have access to the vaccine. those vaccines, some adults, you know, pursuing a third booster shot are a game changer in terms of the jobs recovery. even if there are risks and uncertainty posed by an unpredictable virus, I think the vaccines help us quite a bit, something that we didn't have to such a degree a year ago.
Even though there is a lot of uncertainty, I think that the health conditions have helped retain the recovery, even if it slows at the end of the year.
Great. Thank you.
Yeah. Thanks for the question.
As a reminder, to register a question, please press the one four on your telephone. There are no further questions at this time.
Thank you everyone for joining us this month. We look forward to having you back here for the next report, which will be released on January fifth. The call is now concluded.
That does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line. Have a great day, everyone.