Private employers cut 32K jobs last month — hiking odds of interest rate cut as Commerce Secretary Howard Lutnick goes on defensive

Economic Overview - The US private payrolls unexpectedly dropped by 32,000 jobs in November, primarily due to losses in small businesses, contrasting with an upwardly revised increase of 47,000 jobs in October [1][4][11] - Economists had anticipated a rise in private payrolls, with estimates ranging from 5,000 to 40,000 jobs, indicating a significant miss in expectations [2][11] Federal Reserve Implications - The likelihood of a quarter-point interest rate cut at the Federal Reserve's meeting on December 10 surged to nearly 89%, up from 67% a month prior, following the weak payroll report [3][6] - The private payroll data is particularly significant as it provides one of the few insights into the labor market before the Fed's meeting, especially after the government shutdown delayed other economic reports [6] Sector Performance - Small businesses, defined as those with fewer than 50 employees, experienced the most substantial job losses, shedding over 120,000 jobs in November, marking the largest cuts since May 2020 [11][12][14] - In contrast, medium and large companies added workers during the same period, highlighting a disparity in job growth across business sizes [11] Wage Growth Trends - The annual pace of wage growth for employees remaining in the same position slowed to 4.4% in November, down from 4.5% in October, while those changing jobs saw a wage increase of 6.3%, also a decrease from October's 6.7% [15][17] Consumer Spending Behavior - Economic reports indicate a divide in consumer spending habits, with households earning over $100,000 continuing to spend significantly, while low-income consumers are reducing expenditures on non-essentials [17]