Unexpected Drop in US Private Payrolls: What It Means for Canada's Job Market

US Private Payrolls Decline in November

In a surprising turn of events, US private payrolls unexpectedly declined in November, according to the ADP employment report released on Wednesday. Private employment decreased by 32,000 jobs last month, following an upwardly revised increase of 47,000 jobs in October. This contrasts sharply with economists' forecasts, who had predicted a rise of 10,000 jobs after a previously reported rebound of 42,000 in October.

The ADP report, developed in collaboration with the Stanford Digital Economy Lab, has historically shown variations compared to the government's private payrolls data from the Bureau of Labor Statistics (BLS). The BLS will release its closely watched employment report for November on 16 December, delayed from the original date of 5 December due to the recent federal government shutdown. This report will include non-farm payrolls for October, but notably, the unemployment rate for October will never be known because the shutdown prevented data collection for the household survey used to calculate it.

While the ADP data indicates a potential deterioration in labor market conditions, other metrics like first-time applications for state unemployment benefits have remained stable, aligning with a "no hire, no fire" narrative. Economists attribute this labor market paralysis to economic uncertainty, particularly stemming from tariffs.

In related news, the economy added 119,000 jobs in September, with the unemployment rate rising to a four-year high of 4.4%.