US Private Sector Cut 2,500 Jobs Per Week Heading Into November: ADP

Job growth in the private sector remained sluggish heading into November, new data from private payroll processor ADP has revealed.

Private employers trimmed an average of 2,500 jobs per week in the four weeks ending Nov. 1, according to the ADP report published on Nov. 18.

This follows last week’s report, which found that private businesses were shedding payroll by an average of 11,250 per week over the previous four-week period.

For months, economists and policymakers have discussed the trend of a “low fire, low hire” environment. While hiring has slowed from earlier in the year, ADP reports that the data indicate new hires have accounted for an increasing share of job creation.

The share of new hires reached 4.4 percent in October, which is higher than in October 2023 and October 2024, despite stronger employment growth in those years.

“One explanation is that the number of people employed or looking for work has been shrinking over the last few years, suggesting that people are leaving the workforce at a faster clip,” Nela Richardson, chief economist at ADP, said in the report.

The labor force participation rate was 62.3 percent in August, down from 63.3 percent in February 2020.

“This suggests that the share of new hires has grown as a result of employers replacing retiring and departing workers, and it’s a trend that’s likely to stick,” Richardson said.

Ultimately, says Richardson, more workers are leaving the workforce, with 36 percent of U.S. workers being 55 or older—more than 10 percent higher than in 2015. This has created a situation in which employers have “a need to replace a growing number of departing workers,” she said.

While the pace of new hires is increasing, the pay of new hires is stagnating.

Annual gross pay for new hires was 1.7 percent year over year in October, down from 2.8 percent in the previous year. The median hourly pay has remained steady at $18 per hour for 16 consecutive months, according to ADP.

Other Labor Data Trickles In

In addition to ADP’s weekly snapshot of employment conditions, the Department of Labor has restarted publishing week-to-week jobless claims.

For the week ending Oct. 18, applications for unemployment benefits totaled 232,000, according to the Department of Labor.

Continuing jobless claims—a measure of the number of out-of-work individuals presently receiving unemployment benefits—ticked up to 1.957 million from 1.947 million in the previous week.

Due to the record-breaking government shutdown, the Department of Labor did not publish claims data. The Bureau of Labor Statistics also did not release the nonfarm payroll reports for September or October.

Now that the federal government has reopened, a flow of vital economic data will begin to trickle in, starting with the September jobs report.

The market consensus indicates that the U.S. economy created 50,000 new jobs and that the unemployment rate was unchanged at 4.3 percent.

“Expectations for the September payroll report suggest modest job gains, continuing a pattern of slower, but still positive, hiring,” Mark Hamrick, senior economic analyst at Bankrate, said in a statement to The Epoch Times.

“Keep your seatbelts buckled. As data flow resumes, our understanding of the economy may need to adjust to reality, and so will financial markets.”

In the meantime, the various figures released—prior to and during the government shutdown—suggest that employment conditions are “still weak and near stall speed,” says Federal Reserve Governor Christopher Waller.

Waller, speaking at the Society of Professional Economists’ Annual Dinner event on Nov. 17, shrugged off concerns about inflation, noting that he is paying closer attention to the labor market.

“My focus is on the labor market, and after months of weakening, it is unlikely that the September jobs report later this week or any other data in the next few weeks would change my view that another cut is in order,” he said in prepared remarks.

Fed Chair Jerome Powell warned last month that the central bank may skip an interest rate cut next month due to the lack of government data.

Investors have trimmed the odds of a third consecutive rate cut at the December Federal Open Market Committee meeting. The chances of a quarter-point rate cut have fallen to 55 percent from as high as 67 percent a week ago, according to the CME FedWatch Tool.

The current target range for the benchmark federal funds rate—a key interest rate that influences business and household borrowing costs—is between 3.75 percent and 4 percent.

The Fed will hold its next two-day policy meeting on Dec. 9 and Dec. 10.