By Megan Leonhardt

The latest private employment numbers are expected to show that the labor market remained relatively stable in November. That could create further divides among Federal Reserve officials when they set interest rates next week with less economic data on hand than usual.

The monthly ADP National Employment Report for November is set to be released at 8:15 a.m. Eastern on Wednesday. Economists surveyed by FactSet expect that the U.S. private employers added 40,000 jobs in November, though the Bloomberg consensus is for just a 5,000 monthly gain.

Private employers added 42,000 jobs in October, with sectors like education and health care -- as well as trade, transportation, and utilities -- leading the growth. However, since the release of the October private payroll employment data, ADP's weekly pulse has found that employers have consistently shed jobs. For the four weeks ending Nov. 8, for example, private employment declined by an average of 13,500 jobs a week, ADP reported.

Additionally, the latest Beige Book noted that employment "declined slightly." Around half of districts noted weaker labor demand, while New York, Dallas, and Minneapolis reported slight declines in payrolls from early October to mid-November.

Wednesday's labor data from payroll processor ADP will likely take on an outsize role because the Bureau of Labor Statistics will not release October and November employment information until Dec. 16, after the Federal Open Market Committee meets next week. That delay is due to the government shutdown, which prevented U.S. statistical agencies such as the BLS from collecting, processing, or releasing data during the funding lapse. Still, the weekly ADP data have been a poor predictor of the monthly private payroll estimate over the past year, Morgan Stanley's economists noted earlier this week.

If the more optimistic FactSet consensus estimate for November is accurate, and private payroll growth proves to be more resilient than some recent jobs data suggest, that could complicate the decision for Fed officials heading into their Dec. 9-10 policy meeting.

While Fed Chair Jerome Powell said at the October meeting that the decision to lower the federal-funds rate in December was not a done deal, some major players on the committee have voiced support for a rate reduction in recent weeks. Most notably, New York Fed President John Williams said on Nov. 21 that he saw room to cut rates in the "near term." Both Fed Gov. Christopher Waller and San Francisco Fed President Mary Daly, a non-voter, have more explicitly advocated for a cut at the Dec. 9-10 meeting, citing vulnerabilities in the labor market.

All of that indicates ADP's latest employment data could be a key determinant in how both officials and investors view the odds of a December cut. If the data do not depict a significant downturn, Fed officials worried about the risk of persistent inflation above the 2% target could have more room to argue that keeping rates steady next week is the correct path forward.

Aside from ADP and Beige Book data, several key labor indicators do not show a marked slowdown. The number of Americans filing for unemployment benefits, for instance, hasn't spiked. In fact, the latest totals released last week showed jobless claims fell by 6,000 to 216,000 for the week ending Nov. 22.

The labor differential -- which comes from the Conference Board's consumer confidence data and measures the number of Americans who think jobs are plentiful versus those that feel jobs are hard to get -- steadied in November. The share of consumers reporting that jobs were hard to get edged down to 17.9% last month from 18.3% in October.

Small business employment among firms with fewer than 50 workers also ticked up slightly in November, according to the Paychex Small Business Employment Watch. The index rose to 99.38, up 0.11 percentage points from October, signaling some stabilization over the month.

Financial markets, however, still have been pricing in about a 87% chance of a rate cut in December, according to the CME FedWatch. That's a huge shift from the 37% odds that were in place following the Fed's October meeting.

Wednesday's ADP data, however, could certainly cause yet another shift.

Write to Megan Leonhardt at megan.leonhardt@barrons.com

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December 02, 2025 16:30 ET (21:30 GMT)

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