November private payrolls unexpectedly fell by 32,000, led by steep small business job cuts, ADP reports

Core Insights - The U.S. labor market experienced a significant slowdown in November, with private companies cutting 32,000 jobs, particularly affecting small businesses [1][2] - The decline in payrolls was a stark contrast to the upwardly revised gain of 47,000 positions in October and fell well below the Dow Jones consensus estimate of a 40,000 increase [2] - Larger businesses reported a net gain of 90,000 workers, while establishments with fewer than 50 employees saw a decline of 120,000 jobs, marking the largest drop since March 2023 [2][3] Employment Trends - The education and health services sectors led job gains with 33,000 hires, while leisure and hospitality added 13,000 positions [3] - The most significant job losses occurred in professional and business services, which saw a decline of 26,000 jobs, followed by information services (-20,000), manufacturing (-18,000), and financial activities and construction, both losing 9,000 jobs [4] Wage Growth - The rate of pay growth slowed, with workers remaining in their jobs experiencing a 4.4% year-over-year increase, down 0.1 percentage point from October [4] Economic Outlook - The ADP report is critical as it is the last jobs data before the Federal Reserve's meeting on December 9-10, with futures traders anticipating a nearly 90% probability of a quarter percentage point cut in the key interest rate [5] - Diverging opinions among Fed policymakers exist, with some advocating for cuts to prevent further labor market issues, while others express concern that additional reductions could exacerbate inflation, which remains above the Fed's 2% target [6]