The last employment data before the December Fed decision "surprised" with a unexpected downturn in November's "small nonfarm payroll", supporting expectations of an interest rate cut.

The latest "small non-farm" ADP employment numbers released in the United States show that in November 2025, there was an unexpected decrease of 32,000 private sector jobs. This not only falls far below the market expectation of an increase of 10,000 jobs, but is also the lowest level since March 2023, with the October data being revised upward to an increase of 47,000 jobs. The U.S. Bureau of Labor Statistics is set to release the highly anticipated November non-farm employment report on December 16. Originally scheduled for release on December 5, the report was delayed due to the recent government shutdown, and will include non-farm employment numbers for October. The unemployment rate for October will not be released as the longest government shutdown in history has prevented the collection of household survey data needed to calculate the unemployment rate. The ADP report shows that in November, small businesses (with fewer than 50 employees) cut 120,000 jobs, becoming the main driver of the decline in employment numbers. This indicates that the economic slowdown is having a greater impact on smaller businesses. Wage growth continued to slow in November, with year-on-year increases in both employee retention and job hopping decreasing. This helps alleviate inflation pressures but also reflects a shift in the supply and demand dynamics of the labor market. While ADP indicates a deterioration in the labor market conditions, initial jobless claims data shows a phenomenon of businesses not hiring or firing. Economists suggest that the economic uncertainty caused by tariffs has led to a paralysis in the labor market. This ADP report is the final employment data that the Federal Reserve will receive before its December interest rate decision. The November ADP employment data fell far short of expectations, strengthening the market's anticipation of further rate cuts by the Federal Reserve. This provides new ammunition for the "dovish" voices in the market advocating for rate cuts. While some officials have doubts about the need for further easing, futures traders still believe there is close to a 90% probability that the Federal Reserve will cut the key rate by 25 basis points.