The US labor market took an unexpected hit in November: Economists were anticipating 40,000 new jobs, but private payrolls actually shrank by 32,000 jobs, according to new data from ADP. This marks a sharp reversal from the prior month, when payrolls grew by a revised 47,000 jobs. Small businesses bore the brunt of the losses, shedding 120,000 jobs—the largest drop in this category since March 2023. In particular, companies with 20 to 49 employees lost 74,000 jobs, reports CNBC. The New York Times has a standout quote from ADP chief economist Nela Richardson:
- "It is those mom-and-pop, main street companies, firms, small businesses and establishments that are really weathering what is an uncertain macro environment and a cautious consumer. I see them as a canary in the coal mine."
In contrast, larger businesses, defined as those with at least 50 employees, added 90,000 jobs, helping to offset some of the broader declines. Job gains were recorded in education and health services (up 33,000), as well as in leisure and hospitality (up 13,000), but these increases weren't enough to counteract widespread losses across most other sectors. Professional and business services saw the biggest decline, losing 26,000 jobs. Other sectors that reported job losses include information services (down 20,000), manufacturing (down 18,000), and financial activities and construction, which each lost 9,000 jobs.
The ADP report is the final bit of jobs data the Federal Reserve will have in hand ahead of its December 9-10 meeting. Futures traders are betting heavily—almost 90%—on another quarter-point interest rate cut. The Bureau of Labor Statistics is set to release its own jobs report on December 16, a date pushed back due to the government shutdown.
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