The latest private-sector jobs report has sent ripples through the U.S. economy and political landscape, revealing an unexpected and troubling downturn in hiring, especially among small businesses. According to payroll processor ADP’s National Employment Report released on December 3, 2025, private employers shed nearly 32,000 jobs in November—a sharp reversal from October’s revised gain of 47,000 jobs. The numbers starkly defied expectations, with economists surveyed by FactSet anticipating a 40,000-job increase and others, like Reuters and Bloomberg, predicting more modest gains of 10,000 and 5,000, respectively.
The pain was not distributed evenly. Small businesses, defined as those with fewer than 50 employees, bore the brunt of the losses, slashing more than 120,000 jobs in November. In contrast, medium-sized firms managed to add 51,000 jobs and the largest businesses contributed 39,000 new positions, according to the ADP data cited by multiple outlets including CNBC and The New York Post. This marks the most severe round of small business job cuts since May 2020, as noted by Jeffrey Roach, chief economist for LPL Financial.
Commerce Secretary Howard Lutnick was quick to respond to the grim figures during a series of media appearances, including a widely watched interview on CNBC’s “Squawk on the Street.” When pressed by host Sara Eisen about whether President Donald Trump’s tariffs were to blame for the downturn, Lutnick pushed back: “No, no, it’s not tariffs. Remember, you had the Democratic shutdown, right? And what do you think happens to small business? The people who do business with the U.S. government, they know they’re not getting paid, so they sort of slow down their projects.” He went on to add, “And then, remember, as you deport people, that’s going to suppress private job numbers of small businesses.”
Lutnick’s argument was clear—he attributed the job losses to the government shutdown, which he labeled as “Democratic,” and to the effects of mass deportations of undocumented immigrants. He insisted that these were temporary setbacks: “They’ll rebalance, and they’ll regrow, so I think this is just a near-term event, and you’ll see as the numbers come through over the next couple of months, you’ll see that all pass. Next year, the numbers are going to be fantastic.” Lutnick even went so far as to predict that U.S. GDP would rise above 4% in 2026, doubling down on his optimism.
Yet not all observers were convinced. Critics and economic analysts pointed to other factors—most notably, the Trump administration’s protectionist tariff policies. According to The New Republic, domestic manufacturing, as measured by the Institute for Supply Management Manufacturing index, has now fallen for the ninth consecutive month, a trend that many attribute to the impact of tariffs. Even major retailers like Costco are taking legal action, suing the government to recover tariff payments. President Trump has repeatedly argued that tariffs are paid by other countries and generate windfall revenue for the U.S., claims that have been widely debunked by economists and fact-checkers.
ADP’s chief economist, Nela Richardson, offered a more measured assessment in a press release accompanying the jobs report: “Hiring has been choppy of late as employers weather cautious consumers and an uncertain macroeconomic environment. And while November’s slowdown was broad-based, it was led by a pullback among small businesses.” Richardson’s analysis points to a combination of factors—sluggish consumer spending, economic uncertainty, and perhaps the lingering effects of tariffs—that have made it a tough year for small firms.
The sectoral breakdown of the November job losses paints an even more nuanced picture. Professional and business services shrank by 26,000 jobs, information-related companies lost 20,000, manufacturing fell by 18,000, and both financial activities and construction shed 9,000 jobs each. Consumer-facing industries, however, showed some resilience: education and health services added 33,000 jobs, leisure and hospitality gained 13,000, trade, transportation and utilities eked out a 1,000-job increase, and natural resources and mining grew by 8,000 positions. Still, the overall trend was negative, and the losses were broad-based.
The ADP report, jointly produced with Stanford Digital Economy Lab, is closely watched by markets and policymakers alike—especially this month, since it’s one of the few labor market data points available before the Federal Reserve’s pivotal December 10 meeting. The government shutdown has delayed the release of official jobs data, with the Bureau of Labor Statistics now expected to combine October and November figures in a release scheduled for December 16. Notably, October’s unemployment rate will not be published at all due to the shutdown, leaving an unusual gap in official statistics.
Financial markets reacted swiftly to the ADP report. The odds of a quarter-point interest rate cut at the upcoming Fed meeting soared to nearly 89%, up from 67% just a month earlier, according to the CME FedWatch tool. Chris Zaccarelli, chief investment officer for Northlight Asset Management, summed up the prevailing sentiment: “This morning’s ADP data confirm what a lot of the doves are saying—it’s more important to focus on a weakening labor market than to worry about inflation.”
Wage growth, another key indicator of economic health, also slowed in November. Employees who stayed in the same role saw their annual wage growth drop to 4.4% from October’s 4.5%. Those who changed jobs experienced a 6.3% wage increase, down from 6.7% the previous month. This deceleration, coupled with persistent inflation—still hovering around 3% as of September—has left many Americans feeling squeezed.
The economic anxiety is reflected in public sentiment. A Yahoo Finance/Marist poll conducted in 2025 found that one in three Americans reported their financial situation had declined that year, although more than half said they were satisfied with their savings. The poll also revealed gender disparities in financial optimism: 36% of men felt their finances had improved, compared to only 18% of women.
Despite the somber economic news, the holiday season is providing a brief respite for many families. A Talker survey for Lowe’s found that 55% of parents are just as excited as their children about opening Christmas presents—a small reminder of the enduring joys that persist even in challenging times.
As the nation awaits more comprehensive jobs data and the Federal Reserve’s next move, the debate over what’s driving the downturn—and what can be done to reverse it—rages on. Whether the coming months will vindicate Lutnick’s optimism or the warnings of economic forecasters remains to be seen, but for now, the numbers tell a story of an economy in flux, with small businesses caught in the crossfire.
