Sharp Drop in Employment

The payroll processor Automatic Data Processing is reporting a drop of 250,000 in payrolls last month:

NEW YORK ( — The U.S. economy shed a quarter-million private-sector jobs in November, according to a payroll processor’s report that was worse than economists expected.

Non-farm private employment fell by 250,000 jobs from the previous month on a seasonally adjusted basis, according to the ADP National Employment Report.

The report was expected to show a decline of 200,000 jobs in November, according to a consensus of economist projections compiled by

The link cited follows up with a breakdown of the losses by sector.

By my reckoning that means nearly a million jobs have been lost since the start of the year. When you consider that something like 125,000 new jobs need to be created each month just to keep up with the natural increase, the implications become pretty serious but that’s not what concerns me.

Over the last seven years when you discount the jobs in government or based on government spending, e.g. healthcare and education, job growth has been extremely phlegmatic. Over time we can’t base a healthy economy solely on government jobs or industries like healthcare that derive the greater share of their revenues from government.

Here’s a graph showing the history of job growth:

When you discount government, healthcare, and education jobs, that line goes well below zero for nearly the entire period. Many of the remaining jobs created have been in construction and I don’t think we’ll be seeing a lot of growth in that sector for the foreseeable future. This is a problem that has been brewing for a long time—at least the last 25 years and it’s unclear to me how to correct it.

2 comments… add one
  • Do these statistics take self-employment into consideration? I believe that self-employment has been on the rise over the last decade, but I haven’t had time to double-check the numbers.

  • Larry Link

    Seems to me..that this shows just how important government is and that perhaps we’ve been far less a capitalist country then we assumed we were..Happy Friday…job job hunting.

Leave a Comment