ADP says U.S. economy lost jobs for third time in four months. Fed to weigh weak labor market in rate-cut vote.

By Jeffry Bartash

Businesses cut 32,000 jobs in November, marking the biggest decline since spring 2023

Some companies are hiring temporary workers for the holidays, but finding a permanent job is not as easy.

Privately run businesses eliminated jobs in November for the third time in four months, pointing to a broad slowdown in hiring that threatens to nudge unemployment higher and chip away at the economy.

ADP said businesses shed 32,000 jobs last month, marking the biggest decline since the spring of 2023. The last time hiring was this weak was during the pandemic.

The latest ADP report confirms that a broad hiring freeze remains in place as the year draws to a close. It could sway a divided Federal Reserve to cut interest rates at its meeting next week for the third straight time due to worries about a weakening labor market.

"Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment," said Nela Richardson, chief economist at ADP, the nation's largest processor of payroll checks.

The ADP report, normally a second-tier labor-market indicator, has taken on greater importance due to a record government shutdown that stretched from Oct. 1 to Nov. 12.

The mainstay U.S. employment report, produced by the Labor Department, has been canceled for October, and a combined October- November report won't be published for another two more weeks - after the Fed's Dec. 9-10 meeting.

Before the shutdown, hiring had slowed dramatically as businesses grappled with the effects of tariffs, a crackdown on immigration and general economic uncertainty.

The saving grace has been a low level of layoffs.

Key details: Wall Street forecasters had predicted a 40,000 increase in private-sector jobs in November.

Instead, many key segments of the economy reduced employment. Manufacturers, construction firms, information companies and professional businesses culled more than 70,000 jobs combined.

Employment rose, as usual, among healthcare and social-service providers. Caregivers are constantly adding jobs because of an aging society and high demand for help with medical and other needs.

Hotels and restaurants also added jobs again in one of the ADP report's few bright spots.

Big picture: Just like the weather, the labor market has caught a big chill - and it's not expected to warm up anytime soon.

The Fed has been so worried that it cut interest rates twice this year and may do so again next week, to try to prevent a further rise in unemployment.

Looking ahead: "I think we are going to be in this situation for a few months," Richardson said, referring to the weak hiring environment. She said companies are taking longer to hire and not replacing workers who leave.

Market reaction: The Dow Jones Industrial Average DJIA and S&P 500 SPX were mixed in Wednesday trading.

-Jeffry Bartash

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12-03-25 0949ET