Private Sector Unexpectedly Sheds Jobs in November, Likely Locking in December Rate Cut

10:27 AM EST, 12/03/2025 (MT Newswires) -- Employment in the US private sector surprisingly fell in November, ADP (ADP) reported Wednesday, solidifying expectations that the Federal Reserve will cut interest rates again next week.

Private jobs decreased by 32,000 last month, according to the payroll processing firm. The consensus was for a 10,000 increase in a Bloomberg-compiled survey.

The decline follows an increase in October that was revised to 47,000 from 42,000, the latest ADP report showed.

The Bureau of Labor Statistics won't publish October employment data that was delayed due a now-ended federal government shutdown. The November jobs report is scheduled for release about a week after the Fed announces its next monetary policy decision on Dec. 10.

The ADP data "might be all that (the Federal Open Market Committee) needs for the more dovish leaning governors to counter some hawkish leaning regional presidents to push through another rate cut," Sal Guatieri, senior economist at BMO Capital Markets, said in a report.

Combined job losses of 32,000 in August and September "have established a downward trend," Guatieri said, citing ADP data.

Markets are pricing in an 89% probability that the FOMC will reduce its benchmark rate by a quarter percentage point next week, up from 84% a week ago, according to the CME FedWatch tool.

"Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment," ADP Chief Economist Nela Richardson said. "And while November's slowdown was broad-based, it was led by a pullback among small businesses."

Small businesses slashed 120,000 jobs, while medium-sized and large companies logged gains, the data showed.

"Once again, small businesses (with fewer than 50 workers) shed staff, for a fourth straight month and by a large 120,000," Guatieri said. "This might reflect smaller firms struggling more to adapt to tariff-related supply disruptions."

The goods-producing sector lost 19,000 jobs in November, driven by manufacturing and construction, while employment in the services industry fell by 13,000, according to the report.

Annual pay rose 4.4% for job stayers and 6.3% for job changers, slower than October's growth rates of 4.5% and 6.7%, respectively, ADP said.

The Fed's Beige Book released last week painted a downbeat labor market picture, as most districts saw "little" change in economic activity since mid-October.

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