The ADP Employment Report, which measures private sector payrolls, showed that there were 127,000 jobs created in November. This was weaker than the 200,000 job gains that were expected and almost half the amount reported in October. Declines were seen in some of the more interest rate-sensitive sectors like construction and manufacturing, while leisure and hospitality and healthcare were bright spots.

ADP also reported that pay growth “remained elevated even as it continued a modest but broad-based deceleration.” Annual pay for job stayers increased 7.6% year over year, while job changers saw an average increase of 15.1%, which is down for the fifth consecutive month.

What’s the bottom line? Nela Richardson, chief economist for ADP, said, “Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains. In addition, companies are no longer in hyper-replacement mode. Fewer people are quitting and the post-pandemic recovery is stabilizing.”