The US labour market delivered an unexpected setback in November, with private sector employment declining for the first time in months, according to a closely watched report.
Unexpected Contraction in Private Hiring
The ADP National Employment Report, developed with Stanford Digital Economy Lab, revealed that private payrolls fell by 32,000 jobs last month. This surprising drop followed an upwardly revised gain of 47,000 positions in October. The data confounded economists, who had forecast a modest increase of 10,000 jobs for November.
This report often serves as an informal precursor to the official government figures, though the two counts have historically diverged. The unexpected contraction suggests a potential deterioration in labour market conditions as the year ends.
Awaiting the Official Government Snapshot
All eyes now turn to the Bureau of Labor Statistics (BLS), which will release its comprehensive employment report for November on 16 December. This release was delayed from its original 5 December date due to the recent federal government shutdown.
The upcoming BLS report will be particularly significant as it will also include non-farm payrolls data for October. However, a key piece of data will be permanently missing: the unemployment rate for October will never be known. The historic government shutdown prevented the collection of the household survey data from which the jobless rate is calculated.
A Labour Market in Paralysis?
The conflicting signals in recent data paint a complex picture of the US jobs landscape. While the ADP report points to weakness, other indicators like first-time applications for unemployment benefits have remained stable, suggesting a "no hire, no fire" environment.
Economists posit that ongoing economic uncertainty, partly driven by trade tariffs, has left many businesses in a state of hesitation, effectively paralysing hiring momentum. The last complete snapshot from September showed the economy added 119,000 jobs, with the unemployment rate rising to a four-year high of 4.4%.
The delayed release from the BLS on 16 December will provide the most authoritative view on whether November's private sector decline was an anomaly or the start of a concerning trend.
