ADP: Private payrolls dropped 32,000 positions last month in slowing job market

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US private employers lost 32,000 positions in November, with job creation seemingly locked in a standstill, according to the private payroll processor ADP.

The firm’s revised data showed a gain of 47,000 jobs in October, coming off losses in September and August. Job creation has essentially been flat in the second half of this year, ADP said, and small businesses in particular appeared to struggle in November.

“Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment,” ADP chief economist Nela Richardson said in a statement. “And while November's slowdown was broad-based, it was led by a pullback among small businesses.”

About 46% of all US employees work for small businesses, according to government data.

"What could be the case is that small businesses stay with a lower headcount for a bit of time, until we get through some of these inflationary increases in prices, until we get more certainty on the macro environment," Richardson said on a call with reporters.

Manufacturing and construction dropped positions, as did professional and business services. Jobs were added in education and health services. Gains were concentrated in mid-sized and large businesses, ADP said.

Pay growth is also slowing as hiring stalls, Richardson said.

"Year-over-year pay for job-stayers rose 4.4%, and that's down from 4.5% in October," Richardson said. "For job-changers, it was even a more notable slide downward: 6.7% in October, but 6.3% in November."

The country will get an official look at November’s jobs data on Dec. 16 when the Bureau of Labor Statistics releases its delayed "employment situation" report for the month. The Federal Reserve Bank of Chicago currently estimates that November’s unemployment rate will be little-changed from October — a month for which there will never be an official unemployment rate due to the government shutdown — at 4.44%.

That also matches the government’s unemployment rate for September, with the labor market stuck in a state of low hiring. The Federal Reserve's latest Beige Book, a summary of regional economic conditions across the country, suggested subdued labor demand, more hiring freezes, and even the possibility of AI replacing some entry-level positions.

Meanwhile, American workers feel terrible about the job market. Some 69% of consumers expect unemployment to rise in the year ahead, according to the University of Michigan’s survey of consumers.

Emma Ockerman is a reporter covering the economy and labor for Yahoo Finance. You can reach her at [email protected].

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