The Line: Private employers shed 32,000 jobs in November

Today, we try to explain the current state of the labor market without any help from the BLS.

Private employers shed 32,000 jobs in November

That’s the headline of ADP’s latest employment report. Sounds scary, but at least October’s job growth was revised up to 47,000. ADP also said that job growth in the second half of the year has been flat while wage growth has trended lower. While wage growth has been falling, at 4.4% over the past year it’s still higher than inflation, which enables consumers to keep consuming for now.

Since ADP’s report doesn’t include the government, we are missing a big part of thelabor market. Remember that tens of thousands of federal employees were set to come off the payroll when the fiscal year ended in September. Unfortunately, the BLS won’t be issuing an October employment report, so we’ll have to wait until their November report comes out on December 16 to see how many federal jobs have disappeared.

That’s the hiring side of the labor market — now let’s look at the latest on layoffs.

Initial Jobless Claims Fell to Their Lowest Level in Over Three Years

Nope, that is not a misprint. According to the Labor Department, 191,000 Americans filed for unemployment last week, down from 218,000 the prior week, and the lowest level since September 2022.

How are jobless claims so low? Here’s a couple of possible explanations:

• We are really in the “no-hire, no-fire” economy we keep hearing about.





• People don’t always file for unemployment right after they are laid off, especially if they think they will find another job soon.





• Many laid off workers receive severance packages and won’t file a claim until the money runs out.

The consulting firm Challenger, Gray & Christmas tracks layoff announcements, which totaled 71,321 in November. That’s down from October, but it brings the 2025 total to 1.2 million. That annual figure is 54% higher than a year ago, and the highest total since 2020.

You may wonder why we don’t see higher unemployment claims and job losses with so many layoff announcements. Here are some of the common reasons for this contradiction:

• Big layoffs by companies can take time to materialize.





• Layoffs in one part of a company can be offset by hiring in other areas.





• Differences in the way labor market data is collected.

So, what does this all mean?

Since the BLS’s November report doesn’t come out until after the Fed’s meeting next week, the Fed only has this data to use in their decision-making process. I believe they will cut rates by another 25 basis points, as it’s clear that hiring has stalled and thelayoff announcements keep coming. Markets seem to agree with me, as the CME Group’s FedWatch tool places the probability of a rate cut at just under 90% as of yesterday afternoon.