When the latest ADP report landed on December 3, 2025, it painted a picture of private sector employers cutting 32,000 jobs in November. This marked an unexpected turn, especially after economists had penciled in gains somewhere between 10,000 and 40,000 positions. The drop stood out against October’s revised figure of 47,000 jobs added, flipping the script on what looked like a modest rebound.
Over the past three months, the labor market has felt anything but steady. September saw a loss of 29,000 jobs, with August not far behind at around 3,000 fewer positions. October’s uptick to 47,000 brought some breathing room, yet November’s shed reversed that momentum entirely. This back-and-forth points to choppy hiring, as businesses grapple with hesitant consumers and broader economic fog. Job creation has hovered near flat territory through the second half of 2025, a far cry from earlier vigor.
Small businesses bore the brunt in November, slashing 120,000 jobs from firms with fewer than 50 workers. Companies in the 20-to-49 employee range alone dropped 74,000 roles, the steepest cut since March 2023. Larger outfits, those with 50 or more on payroll, managed a net gain of 90,000, including 39,000 from giants with 500-plus staff. Regionally, the West added 67,000 while the South lost 43,000, highlighting uneven pressures across the map.
Sector breakdowns reveal more cracks. Education and health services led with 33,000 new jobs, followed by leisure and hospitality at 13,000. Yet losses piled up elsewhere: professional and business services shed 26,000, manufacturing 18,000, and both financial activities and construction dropped 9,000 each. Information services also took a hit. These patterns echo the small-firm retreat, since such companies often cluster in services and construction.
Wage trends softened too. Workers sticking with their jobs saw pay rise 4.4% year over year, down from 4.5% in October. Job switchers fared better at 6.3%, but that eased from 6.7% prior. ADP’s chief economist, Nela Richardson, noted how employers face cautious spending and macro uncertainties, with small businesses pulling back most sharply. This data, drawn from over 26 million U.S. private payrolls, offers a high-frequency snapshot ahead of the Federal Reserve’s December 9-10 meeting. Traders see high odds of another rate cut, though opinions split on balancing labor risks against sticky inflation. The Bureau of Labor Statistics nonfarm payrolls, delayed by government shutdown, follows on December 16.
Private payrolls reflect real-time business decisions in a shifting landscape. Small firms, engines of growth elsewhere, now signal caution that could linger into year-end. Larger players hold steadier, but overall flatness over recent months raises questions about sustained momentum. As December unfolds, watch how holiday demand and policy moves play out against this backdrop.Â
