U.S. private employers unexpectedly cut jobs in November, signaling fresh weakness in the labor market and reinforcing expectations for another Federal Reserve rate cut next week.
Private payrolls fell by 32,000, according to ADP's National Employment Report released Wednesday. It's a sharp reversal from the 42,000 jobs added in October and well below economists' expectations for a modest 5,000 gain.
ADP said job creation has been flat through the second half of 2025, while pay growth continues to cool. Hiring weakened across several major sectors, including 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 Dr. Nela Richardson, ADP's chief economist.
Where the Job Losses Hit
The goods-producing sector lost 19,000 jobs in November, including a 9,000 decline in construction and an 18,000 drop in manufacturing. Service providers shed 13,000 positions, with the sharpest cuts in professional and business services (down 26,000), information (down 20,000), and financial activities (down 9,000).
The regional breakdown showed wide disparities. The Northeast posted a steep 100,000-job decline, while the South lost 43,000. In contrast, the Midwest added 45,000 jobs and the West gained 67,000.
Employment trends also varied by business size. Small businesses saw the largest pullback with a loss of 120,000 jobs. Medium-sized firms added 51,000, and large employers increased their payrolls by 39,000.
Pay growth continued to slow in November. Job stayers saw year-over-year wage gains of 4.4%, down from 4.5% in October. Pay for job changers rose 6.3%, easing from 6.7% the previous month.
Markets Raise Bets On A December Rate Cut
The data strengthened expectations that the Federal Reserve will deliver a third straight rate cut at the Dec. 10 meeting.
The CME FedWatch tool now assigns an 89% probability of a 25-basis-point reduction. Futures also price a 25% chance of an additional cut at the late-January meeting.
U.S. equity futures traded slightly higher in the early hours.
The U.S. dollar index extended its losing streak to an eighth session, sliding to its weakest level since late October.
Treasury yields moved lower, with the 10-year dropping to 4.05%, a three-basis-point decline, while the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) rose about 0.5% in premarket trading. Gold – tracked by the SPDR Gold Shares (NYSE:GLD) – remained steady, with prices hovering around $4,200 per ounce .
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