U.S. Private-Sector Employment Reinforces Dovish Lean Ahead of FOMC Meeting — Evening Brief – 12.03.25 

U.S. private-sector employment unexpectedly fell by 32,000 jobs in November, reversing October’s upwardly revised +47,000 gain and missing economist expectations for a +40,000 increase, according to the ADP National Employment Report released Wednesday. The decline, one of the weakest readings of 2025, was concentrated among small businesses, which shed 120,000 positions, while larger firms added a net 90,000.  

Hiring weakened broadly across industries, with steep drops in professional and business services (-26,000), manufacturing (-18,000 or -19,000), information (-20,000), and construction (-9,000), alongside losses in financial activities. Education and health services (+33,000) and leisure/hospitality (+13,000) provided limited offsets. ADP Chief Economist Nela Richardson attributed the pullback to “cautious consumers and an uncertain macroeconomic environment,” noting small firms’ sensitivity to credit and demand shifts. Regionally, the Northeast lost 100,000 jobs, while the West gained 67,000.  

Wage growth cooled further, with job-stayers’ pay rising 4.4% year-over-year (down from 4.5%) and job-changers at 6.3% (from 6.7%), reflecting easing labor tightness. 

Though ADP is not the official government payrolls report, the data carries meaningful implications for monetary policy. With private employment contracting and wage growth softening, the report bolsters the case for a dovish tilt at next week’s FOMC meeting. Markets had been bracing for a potentially hawkish tone accompanying the widely expected rate cut, but November’s labor softness increases the probability that policymakers will emphasize economic caution rather than inflation vigilance. 

The Fed’s final meeting of the year now arrives against a backdrop of weakening job creation, easing wage pressures, and heightened recession concerns—factors that collectively push the central bank closer to a more accommodative policy posture.