ADP: Small business drive large 32K private payroll drop in November

ADP: Small business drive large 32K private payroll drop in November

Published: Dec. 3, 2025 at 10:23 AM 

By Chris Benson, UPI

 ADP said Wednesday that small businesses and private companies were hit hardest in November by a slowdown in the U.S. labor market.

 The private payroll processor's monthly employment report indicated some 32,000 were shed by private employers. It said job creation had been "flat" during the second half of this year with pay growth on a "downward" trend. 

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

 It marked a sharp decline from October with a revised 47,000 job gain, and arrived under Wall Street estimates of a near 40,000 increase. Bigger businesses with 50 or more workers saw a 90,000 net job gain, but establishments retaining less than 50 employees saw a 120,000 decline in jobs. 

It marked that largest drop since March 2023. Some 33,000 new hires were seen in areas of education and health services come on top of around 13,000 jobs added in the leisure and hospitality industry, which was an overall broad decline. 

 November hiring was particularly weak in manufacturing, professional and business services, information, and construction. Around 26,000 jobs were lost in professional and business services, some 20,000 in information services, and about 18,000 in manufacturing, finance and construction with losses both at 9,000. 

 Meanwhile, the Federal Reserve is slated to meet Dec. 9-10 with members reportedly holding misgivings over a slight cut in interest rates. The U.S. Department of Labor will release its numbers on nonfarm payroll jobs Dec. 16, which was a delayed unveiling due to the government shutdown.

Small Businesses Shed 120,000 Jobs

 

 ADP Report Shows Sharp November Slowdown as Small Businesses Shed 120,000 Jobs

By Chris Benson, UPI

Dec. 3, 2025

The U.S. labor market hit an unmistakable soft patch in November, according to new data released Wednesday by ADP, which reported that private-sector employers collectively cut 32,000 jobs — with small businesses bearing the brunt of the decline.

The monthly snapshot from the payroll processing giant painted a picture of an economy losing momentum in the final stretch of 2025. ADP noted that hiring has been “flat” since midsummer and wage growth continues to cool as employers confront shakier consumer spending and a macroeconomic outlook clouded by uncertainty.

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

Small Firms Hit Hardest

The overall decline masks a dramatic split between large companies and the nation’s smallest employers. Firms with 50 or more workers added a combined 90,000 jobs last month, according to ADP’s data. But businesses with fewer than 50 employees — the core of Main Street — shed a staggering 120,000 positions, the steepest drop since March 2023.

That reversal stands in stark contrast to October’s figures, when the private sector logged a revised gain of 47,000 jobs. November’s contraction also fell well short of Wall Street forecasts, which anticipated roughly 40,000 new positions.

The numbers dovetail with a growing body of evidence that small employers, already squeezed by elevated borrowing costs and cooling consumer demand, are increasingly struggling to sustain payrolls as the year draws to a close.

Sector-by-Sector Strain

Though a handful of industries continued to expand, November was largely a month of retrenchment.

Education and health services led the way with 33,000 new jobs — a reflection of still-strong demand for healthcare providers and support staff. Leisure and hospitality, a sector that had been reliably buoyant through the year, added another 13,000 roles.

But those bright spots were overshadowed by widespread losses elsewhere:

• Professional and business services shed 26,000 jobs.

• Information services dropped 20,000.

• Manufacturing fell by 18,000, marking yet another sign of a cooling goods economy.

• Finance and construction both lost 9,000 jobs.

The weakness in construction — typically sensitive to interest rate swings — comes as some Fed officials hint they may be less inclined to cut rates at their upcoming December 9–10 policy meeting. Analysts say the ADP report may reinforce the central bank’s caution.

All Eyes on the Delayed Jobs Report

The next major indicator lands Dec. 16, when the Labor Department releases its official nonfarm payroll numbers for November. The report, typically scheduled earlier in the month, was pushed back due to the recent government shutdown.

Economists will be looking closely to see whether the federal numbers confirm ADP’s picture of a labor market losing steam — and how deeply the small-business downturn is rippling through the broader economy.

For now, the latest evidence suggests that while big employers are still hiring, the country’s smallest firms — long the engine of job creation — are shifting abruptly into reverse just as the holiday season begins.

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