The U.S. employment market suffered its sharpest contraction since March 2023, as private-sector payrolls shrank by 32,000 positions in November, according to data released on Wednesday by ADP. The report highlighted a growing strain on small businesses, which were hit disproportionately.
Contrary to expectations for modest growth, the ADP report revealed a stark reversal from October’s upwardly adjusted gain of 47,000 jobs. The latest figure also fell significantly below economists’ consensus, compiled by Dow Jones, which had forecast a 40,000 increase in payrolls.
Larger firms—defined as those with at least 50 employees—managed to register a net hiring increase of 90,000. In contrast, businesses with fewer than 50 employees saw workforce reductions totaling 120,000, including a significant 74,000 drop among companies employing between 20 and 49 workers. ADP noted that this represents the steepest monthly decline among small businesses since March of the previous year.
The ADP release is the final significant labor data before the Federal Reserve convenes for its Dec. 9-10 meeting. According to futures market data cited by the source, traders are betting with about 90% certainty on another quarter-point interest rate cut, despite internal debate among Fed policymakers over the necessity of further easing. This probability remained unchanged following the ADP announcement.
The Bureau of Labor Statistics is scheduled to report official November nonfarm payrolls data on Dec. 16, after a delay caused by the recent government shutdown. The agency will not issue revised figures for October due to data gaps during the partial closure.
