ADP Research data indicates U.S. companies are shedding payrolls faster than at any time since early 2023, adding to concerns about a more pronounced weakening in the labor market.
ADP reports that private-sector payrolls decreased by 32,000 in November, the fourth time in the last six months they’ve fallen, according to a report from Bloomberg. The median estimate in a Bloomberg survey of economists called for a 10,000 gain.
Wednesday’s weak ADP report risks heightening concerns of a more rapid deterioration in the labor market ahead of the Federal Reserve’s final policy meeting of the year next week, according to Bloomberg.
Policymakers have been divided as to whether they’ll cut interest rates for a third straight meeting as they attempt to balance the slowdown in the job market with still-elevated inflation. Investors, however, widely expect the Fed to lower borrowing costs next week.
Following the report, S&P 500 futures held gains and Treasury yields moved lower.
“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” Nela Richardson, chief economist at ADP, said in a statement. “And while November’s slowdown was broad-based, it was led by a pullback among small businesses.”
Richardson is a contributor to Bloomberg Television. Companies with fewer than 50 employees shed 120,000 jobs, the report showed. That’s the largest one-month decline since May 2020. Establishments with 50 or more employees increased headcount.
Professional and business services led the decline in payrolls, followed by information and manufacturing. Hiring in education and health services increased. The ADP report, published in collaboration with the Stanford Digital Economy Lab, showed wage growth cooled, according to Bloomberg. Workers who changed jobs saw a 6.3% increase in pay, the lowest since February 2021. Those who stayed put saw a 4.4% gain. ADP bases its findings on payrolls covering more than 26 million US private-sector employees.
