Dive Brief:
- Companies cut payrolls by 32,000 last month, payroll processor ADP said Wednesday, as Federal Reserve officials remain divided over whether a cooling job market warrants trimming the main interest rate during a policy meeting next week.
- Private employers with fewer than 50 workers shed 120,000 jobs in November, while larger firms increased payrolls by 90,000, ADP said. Pay for employees who remained with their employer rose 4.4%, 0.1 percentage point less than in October. Those who changed jobs increased their pay 6.3%, 0.4 percentage point less than the prior month, ADP said.
- “Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” ADP Chief Economist Nela Richardson said in a statement.
Dive Insight:
During the past week traders in interest rate futures have increased the odds that the Fed next week will cut the benchmark interest rate by a quarter point to 89% from 83.4.%, according to the CME FedWatch Tool. The federal funds rate is currently at a range between 3.75% to 4%.
Some Fed officials have flagged the dimming employment outlook and called for a third straight reduction in borrowing costs at their Dec. 9-10 meeting.
Other central bankers have noted that inflation remains well above the Fed’s 2% goal and favor holding the main rate steady to avert a resurgence in price pressures.
Participants at the most recent central bank policy gathering in October “expressed strongly differing views about what policy decision would most likely be appropriate at the committee’s December meeting,” according to minutes of the meeting released on Nov. 19.
The 12 Fed district banks last week in their so-called Beige Book report noted a softening in the labor market.
“Employment declined slightly over the current period with around half of districts noting weaker labor demand,” according to a summary of the regional report. “Despite an uptick in layoff announcements, more districts reported contacts limiting headcounts, using hiring freezes, replacement-only hiring and attrition than through layoffs.”
The ADP employment report for November has gained unusual attention because the 43-day-long shutdown of the federal government halted release of official data on employment.
The Bureau of Labor Statistics has delayed publishing its job report for November by more than three weeks to Dec. 16, six days after the meeting of policymakers.
Other unofficial indicators of job market health have soured in the past several weeks.
“Mid-2026 expectations for labor market conditions remained decidedly negative,” the Conference Board said on Nov. 25, describing results of its monthly consumer confidence survey. Only 27.6% of consumers said jobs were “plentiful,” a decrease of 1 percentage point from October.
Among owners of small businesses, 56% reported hiring or trying to hire in October, a decline of 2 percentage points from the prior month, the National Federation of Independent Business said last month.
