The National Employment Report by Automatic Data Processing (ADP), the largest processor of private sector payrolls, indicates that the economy lost 169,000 jobs in November. While that is an improvement over both the 190,000 jobs lost in October as reported by the Bureau of Labor Statistics (BLS) and the 195,000 that ADP now says the economy lost in October (revised from a loss of 203,000), it is far more than consensus expectations of a loss of only 100,000 jobs for the month.

Job losses were widespread and roughly equally split between the service sector, which shed 81,000 jobs, and the goods-producing sector, which lost 88,000 jobs, according to ADP. The jobs lost in goods producing were equally split with construction and manufacturing both dropping 44,000.

Given that the service sector is far larger, with a total of 89.959 million people working in it, while the goods producing sector employs just 18.197 million, the goods producing sector continues to be hit much harder on a percentage basis. On the other hand, a decline of 44,000 jobs in manufacturing is actually the smallest drop in that area since May of 2008. However, this data seems at odds with the ISM data that came out yesterday, which pointed to a small increase in manufacturing employment in both October and November, with November’s decline being smaller than October’s.

For construction, the declines have been relentless — this is the 34th straight month of declines in that area. Since January 2007, over 1.7 million construction jobs have been lost. On the service side, the Financial services sector continues to drop jobs, by 17,000 in November — the 24th straight decline there.

By business size, small businesses bore thee brunt of the jobs losses, losing 68,000 positions, followed by medium-sized companies (50 to 499 employees) which lost 57,000. Large businesses dropped 44,000 jobs in the month.

Relative to expectations — and the very good news we had been seeing in the initial unemployment claims data — this has to be seen as a very weak report, even if it does point to rather significant improvement over where we were earlier this year. Lately, the ADP numbers have done a good job tracking the official BLS numbers, but that has not always been the case.  We will see on Friday morning just how accurate ADP was this month.

Dirk van Dijk, CFA is the Chief Equity Strategist for Zacks.com. With more than 25 years investment experience he has become a popular commentator appearing in the Wall Street Journal and on CNBC.  Dirk is also the Editor in charge of the market-beating Zacks Strategic Investor service.

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