US private-sector jobs drop 32,000 in Nov as small businesses pull back, ADP says

Private-sector employment in the United States fell by 32,000 jobs in November, one of the weakest readings in two years and raising concerns about the labour market’s durability for late 2025.

The ADP National Employment Report, produced with the Stanford Digital Economy Lab, showed a broad slowdown, contrasting with economists’ forecasts for a 40,000-job gain.

The decline also represented a significant reversal from October, when payrolls were revised up to show a 47,000-job increase, underscoring what analysts describe as an increasingly uneven hiring environment.

According to ADP, the downturn was more severe than anticipated as businesses confronted softer consumer demand and an uncertain macroeconomic backdrop.

Small businesses lead the contraction

ADP chief economist Nela Richardson said the slowdown was widespread but particularly pronounced among smaller firms.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” said Richardson.

“And while November's slowdown was broad-based, it was led by a pullback among small businesses."

Establishments with fewer than 50 workers shed a total of 120,000 jobs, including a loss of 74,000 positions among medium-sized and small businesses employing between 20 and 49 people.

The contraction represented the steepest decline since March 2023 and offset the 90,000 positions added by companies with 50 or more employees.

Job creation has been largely stagnant through the second half of 2025, with hiring hit hardest in manufacturing, professional and business services, information, and construction.

Professional and business services saw the largest single drop at 26,000 positions, followed by information services with a 20,000-job decline.

Manufacturing lost 18,000 jobs, while financial activities and construction each fell by 9,000.

Sectors that did add workers were limited. Education and health services led gains with 33,000 new hires, while leisure and hospitality added 13,000 positions.

Pay growth slows as labour demand softens

Pay increases also moderated in November.

Year-over-year wages for workers staying in their jobs rose 4.4%, a slight decrease from October’s 4.5%.

Job changers saw a larger deceleration, with pay growth slowing to 6.3% from 6.7% the previous month.

The cooling in wage gains aligns with the broader easing in labour-market tightness observed throughout the year.

The ADP report, based on anonymised payroll data from more than 26 million workers, arrives just days before the Federal Reserve’s December 9-10 policy meeting.

Futures markets indicate nearly a 90% probability the central bank will deliver another quarter-point rate cut, though policymakers remain divided.

Some officials argue further easing is warranted to pre-empt deeper labour-market weakness, while others warn that additional cuts risk maintaining inflation above the Fed’s 2% target.

Fed decision looms as BLS report delayed

The Bureau of Labour Statistics will publish its nonfarm payrolls report on December 16, later than usual due to the recent government shutdown.

The ADP figures are likely to increase anticipation around that release, as investors and policymakers look for clearer evidence on whether the labour market is merely cooling or approaching a more troubling phase of contraction.