This audio is automatically generated. Please let us know if you have any comments.
Dive brief:
- Businesses cut payrolls by 32,000 last month, payroll processor ADP said Wednesday, as Federal Reserve officials remain divided over whether a chilly labor market warrants cutting the main interest rate during a policy meeting next week.
- Private entrepreneurs with less than 50 employees eliminate 120,000 jobs in Novemberwhile larger firms increased payrolls by 90,000, ADP said. The compensation of employees who stayed with their employer increased by 4.4%, 0.1 percentage points less than in October. Those who changed jobs increased their salary by 6.3%, 0.4 percentage points less than the previous month, ADP said.
- “Hiring has been choppy of late as employers resist cautious consumers and an uncertain macroeconomic environment,” ADP Chief Economist Nela Richardson said in a statement.
Diving knowledge:
During the past week Interest rate futures traders have raised the odds that the Fed will cut its benchmark interest rate by a quarter point next week to 89% from 83.4%, according to a the CME FedWatch tool. The federal funds rate is currently in a range between 3.75% and 4%.
Some Fed officials have pointed to the weakening job outlook and called for a third straight cut in borrowing costs at their Dec. 9-10 meeting.
Other central bankers have noted that inflation remains well above the Fed’s 2% target and favor keeping the key rate steady to avoid a resurgence of price pressures.
Participants at the central bank’s latest policy meeting in October “expressed very different views on what policy decision would be most appropriate at the committee’s December meeting,” according to minutes of the meeting released on November 19.
The Fed’s 12 district banks last week in their so-called Beige Book report noted a softening of the labor market.
“Employment declined slightly over the current period and around half of the districts saw weaker labor demand,” according to a summary of the regional report. “Despite an increase in layoff announcements, more districts reported contacts limiting headcount, using hiring freezes, replacement-only hiring, and attrition than through layoffs.”
The ADP jobs report for November has received unusual attention because the 43-day shutdown of the federal government halted the release of official employment data.
The Bureau of Labor Statistics has delayed the release of its November jobs report by more than three weeks to December 16, six days after the meeting of policymakers.
Other unofficial indicators of labor market health have deteriorated in recent weeks.
“Mid-2026 expectations for labor market conditions remained decidedly negative,” the Conference Board said on Nov. 25, outlining the results of its monthly consumer confidence survey. Only 27.6% of consumers said jobs were “abundant,” down 1 percentage point from October.
Among small business owners, 56% reported hiring or trying to hire in October. a decrease of 2 percentage points from the previous month, the National Federation of Independent Businesses said last month.
