US Factories Cut 26,000 Jobs in November as Manufacturing Woes Persist

A factory worker is seen at a wind tower-manufacturing plant in Pueblo, Colo., on Nov. 29, 2023. Andrew Caballero-Reynolds/AFP/Getty Images

The U.S. manufacturing industry shed 26,000 jobs in November, according to the latest ADP National Employment Report, which underscored continued challenges for America’s factories despite some emerging signs of stabilization in other recent manufacturing activity reports.

Private employers in the United States added a total of 146,000 jobs last month, according to the ADP report, released on Dec. 4. The overall figure was lower than analysts’ prediction for 150,000 new positions, with weakness evident in goods-producing industries, which saw a net gain of just 6,000 new positions last month.

“While overall growth for the month was healthy, industry performance was mixed,” Nela Richardson, ADP chief economist, said in a statement. “Manufacturing was the weakest we’ve seen since spring. Financial services and leisure and hospitality were also soft.”

The construction sector added 30,000 jobs in November, and the mining and natural resources industry saw headcount rise by 2,000. However, manufacturing lost 26,000 jobs, extending October’s loss of 19,000 factory positions and highlighting the ongoing contraction in the ailing sector.

The latest manufacturing activity report from the Institute of Supply Management (ISM) showed that in November the sector contracted for the eighth consecutive month and the twenty-fourth time in the last 25 months.

“Sixty-six percent of manufacturing gross domestic product (GDP) contracted in November, up from 63 percent in October,” Timothy Fiore, chair of the ISM’s manufacturing business committee, said in a statement.

While there were some positive signs in the ISM data—such as new orders expanding for the first time in eight months and input costs rising at a slower pace—the overall picture was one of continued weakness, including a reduction in factory employment.

November’s factory job cuts, as highlighted in the ISM and ADP data, dovetail with the latest numbers from the Bureau of Labor Statistics (BLS), which showed an October drop in both job openings and hires in the manufacturing sector. Further, the most recent nonfarm payrolls report from BLS shows that manufacturing shed 6,000 jobs in September, with headcount reductions in October growing to 46,000.

Job data for November is due to be released on Dec. 6, with economists polled by Reuters predicting that the U.S. economy added 200,000 positions last month, after adding a paltry 12,000 in October, the lowest number since December 2020.

“Over the past several months, we’ve noted that the manufacturing sector seemed more or less stuck in a holding pattern, with sluggish global economic growth, still-high financing costs, and an uncertain outlook for U.S. tax, regulatory, and trade policy acting as stiff headwinds,” Richard Moody, chief economist at Regions Financial Corporation, wrote in a recent note.

“While the election is behind us, the policy outlook remains uncertain. As such, the manufacturing sector will remain on very tentative footing into 2025 with a meaningful rebound further off in the distance than we and many others had anticipated would be the case.”

Services, by contrast, have fared far better than manufacturing in recent months. The latest ISM report on nonmanufacturing industries shows that economic activity in the services sector expanded for the fifth consecutive month in November, marking the fifty-first expansion in the last 54 months. Still, there was same moderation in service sector activity, as the headline index slipped to 52.1 last month after jumping to 56.0 in October. Readings above 50 indicate growth.

The ongoing slump in manufacturing is a key issue facing the incoming administration of President-elect Donald Trump, who has put forward plans to revive the sector, including by cutting regulations and lowering energy costs for both consumers and businesses.

Unlike November’s job cuts in manufacturing, employment in the services sector grew last month, according to data from both ADP and the ISM. The ISM’s employment index landed in expansion territory in November for the fourth time in five months, while ADP figures showed 140,000 service sector jobs added, led by education/health services (50,000) and trade/transportation/utilities (28,000).

Despite the drag from the manufacturing sector’s ongoing woes, the U.S. economy appears to have retained its momentum from the third quarter. The latest GDP estimate for the fourth quarter projects the economy growing at 3.2 percent in annual terms, up from the 2.8 percent pace of growth in the July–September period, according to the Federal Reserve Bank of Atlanta.