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Investing.com - U.S. private payrolls unexpectedly declined in November, underscoring recent concerns over a slowing labor market in the world’s largest economy.
Private employment fell by 32,000 roles last month after growing by an upwardly-revised 47,000 in October, the ADP National Employment Report showed on Wednesday. Economists had anticipated an increase of 5,000.
Job creation has been flat during the second half of 2025, while pay growth has been on a downward trend, ADP said, adding that November hiring was particularly weak in manufacturing, professional and business services, information, and construction.
“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment. And while November’s slowdown was broad-based, it was led by a pullback among small businesses,” said Nela Richardson, Chief Economist at ADP, in a statement.
Given a dearth of official economic indicators because of a record-long federal government shutdown, alternative sources, such as those from ADP, have taken on added importance for investors and policymakers hoping to glean some insight into the state of U.S. employment.
Meanwhile, the U.S. Bureau of Labor Statistics said it would not be able to publish its report on employment for October, and would fold these numbers into its November figures. As a result, the unemployment rate for October will never be known.
Still, signs of a fading jobs picture have been cropping up in the data that is available. The U.S. unemployment rate in September climbed to its highest level in almost four years, while a survey of consumer confidence fell to its lowest point since April. The Federal Reserve’s "Beige Book" report also suggested a slight decrease in employment, with more of the central bank’s districts flagging hiring freezes.
A faltering labor market could boost the case for the Fed to slash interest rates at the end of its December 9-10 meeting. The odds of a quarter-point cut at the gathering now stand at roughly 89%, according to CME FedWatch.
In theory, lowering borrowing costs may help spur investment and hiring, albeit at the risk of pushing up inflationary pressures.
“The modest fall in the ADP payrolls measure in November, coming on the back of a similar message from the Fed’s Beige Book, should be enough to persuade the [rate-setting Federal Open Market Committee] to vote for another cut next week,” said Stephen Brown, Deputy Chief North America Economist at Capital Economics, in a note.
However, they flagged that the ADP metric has historically been a "poor guide" of the labor market compared to the more comprehensive official nonfarm payroll report.