US companies cut 32,000 private-sector jobs in November, according to ADP data released on Wednesday. This unexpected drop, the largest since March 2023, contrasts with the 47,000 net jobs created in October (revised upwards) and far exceeds economists' forecasts for a gain of about 40,000 positions. The decline is largely due to small businesses, which shed 120,000 jobs, while larger companies, conversely, created 90,000 positions.
The job losses affected most sectors, notably professional and business services (-26,000), information (-20,000) and manufacturing (-18,000). The financial sector and construction each shed 9,000 jobs. Offsetting the trend, healthcare and education services created 33,000 jobs, followed by leisure and hospitality (+13,000), illustrating some stability in services relating to personal care.
This report, the Fed's final key indicator ahead of its December 9-10 meeting, reinforces expectations of monetary easing. Annual wage growth slowed slightly to 4.4%, against 4.5% in October. Nearly 90% of market participants now anticipate a 25bp cut in the federal funds rate. However, the Fed remains divided between supporting employment and fearing a return of inflationary pressures, as inflation remains above the 2% target. The official Bureau of Labor Statistics report is due out on December 16, after a delay due to the federal government shutdown.
