In a surprising turn for the American labour market, private sector employment unexpectedly contracted last month, according to a closely watched report.
Unexpected Contraction in Private Sector Jobs
The ADP National Employment Report, developed with the Stanford Digital Economy Lab, revealed that private payrolls decreased by 32,000 jobs in November. This decline comes after a revised increase of 47,000 positions in October, which was adjusted upwards from an initial estimate of 42,000.
This result confounded economists' forecasts, who had anticipated a rise of 10,000 jobs. The data suggests a potential deterioration in labour market conditions as the year draws to a close.
Awaiting the Official Government Snapshot
The market's primary focus now shifts to the official employment report from the US Bureau of Labor Statistics (BLS). The release of the November report has been delayed until 16 December, pushed back from its original 5 December date due to the recent federal government shutdown.
This forthcoming report will be particularly significant as it will also include the non-farm payrolls data for October. Notably, the unemployment rate for October will never be officially calculated. The historic government shutdown prevented the collection of the household survey data necessary to determine the jobless figure.
A Labour Market in a State of Paralysis?
While the ADP data points to weakening job creation, other indicators present a mixed picture. First-time claims for state unemployment benefits have remained stable, supporting a narrative of a stagnant "no hire, no fire" environment.
Economists suggest that ongoing economic uncertainty, largely driven by trade tariffs, has left many businesses in a state of hesitation, effectively paralysing hiring momentum. The last complete dataset from September showed the economy added 119,000 jobs, with the unemployment rate climbing to a four-year high of 4.4%.
Historically, the ADP estimate has frequently diverged from the official BLS count of private payrolls, making the delayed 16 December release all the more critical for understanding the true health of the US jobs market.
