U.S. Labor Market Slows in November: ADP Report Highlights Job Cuts and Industry Trends
The U.S. labor market faced a slowdown in November, with private companies cutting 32,000 workers, particularly impacting small businesses, according to a report by payrolls processing firm ADP. The decline in payrolls was more severe than expected, following a gain in October. Larger businesses added 90,000 workers, but smaller establishments with fewer than 50 employees saw a decline of 120,000, the largest drop since March 2023.
In terms of industry sectors, education and health services led in hiring with 33,000 new hires, while leisure and hospitality added 13,000 jobs. However, there was a broad-based decline across industries, with professional and business services experiencing the biggest loss of 26,000 jobs. Other sectors that shed jobs included information services, manufacturing, financial activities, and construction.
The rate of pay also slowed down, with workers experiencing a 4.4% year-over-year increase, slightly lower than in October. ADP's chief economist, Nela Richardson, noted that hiring has been inconsistent due to cautious consumers and economic uncertainty, with small businesses leading the pullback in November.
The ADP report serves as the final snapshot of the job market before the Federal Reserve's meeting on December 9-10. Despite some reservations among officials, futures traders are predicting a high likelihood of the central bank approving another quarter percentage point cut in its key interest rate to address the economic challenges.