US Private Payrolls Unexpectedly Decline by 32,000 in November, ADP Reports

Unexpected Downturn in Private Sector Employment

United States private payrolls experienced an unexpected decline in November, with private employers shedding 32,000 jobs, according to the latest ADP National Employment Report released on Wednesday, December 3, 2025. This figure stands in stark contrast to economists' expectations, who had largely forecast an increase in employment, with some polls predicting a rise of 10,000 to over 40,000 jobs. The November decline represents the largest drop in private employment since March 2023.

The unexpected contraction follows an upwardly revised increase of 47,000 jobs in October, indicating a recent shift in the labor market's trajectory. Nela Richardson, chief economist at ADP, commented on the trend, stating that 'Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment.'

Small Businesses Bear the Brunt of Job Losses

The November slowdown was broad-based across various sectors but was predominantly driven by a significant pullback among small businesses. Firms with fewer than 50 employees collectively shed 120,000 jobs. Specifically, businesses with 1 to 19 employees lost 46,000 positions, while those with 20 to 49 employees saw a reduction of 74,000 jobs.

In contrast, larger enterprises demonstrated resilience, with medium-sized businesses (50-499 employees) adding 51,000 jobs and large businesses (500+ employees) increasing their payrolls by 39,000 positions. Matthew Martin, senior U.S. economist at Oxford Economics, highlighted the challenges faced by smaller firms, noting that 'Small firms, those with less than 50 employees, have felt the pinch of policy uncertainty, rising input costs and high interest rates the most.'

Sectoral and Regional Impacts

Several sectors experienced notable job losses in November, including:

• Professional and Business Services: Down 26,000
• Information: Down 20,000
• Manufacturing: Down 18,000
• Construction: Down 9,000
• Financial Activities: Down 9,000

Conversely, some sectors continued to see growth, with Education and Health Services adding 33,000 jobs and Leisure and Hospitality gaining 13,000 jobs. Geographically, job losses were concentrated along the Eastern Seaboard, particularly in the New England, Mid-Atlantic, and South Atlantic census divisions.

Economic Implications and Future Outlook

The ADP report is closely monitored as an indicator of the U.S. economy's health, especially given delays in the official government jobs report from the Bureau of Labor Statistics (BLS) due to a federal government shutdown. The BLS report for November is anticipated on December 16. The unexpected decline in private payrolls could also intensify expectations for a potential interest rate cut by the Federal Reserve.

While pay for individuals remaining in their jobs saw a year-over-year increase of 4.4% in November, this figure represents a slight decrease from the 4.5% recorded in October.