In late October, the private sector’s latest data showed a decline in employment in the United States, indicating a weak labor market.
According to reports from Newsmax, the payroll services firm ADP released its latest real-time employment market trends on Tuesday, November 11th, revealing that US businesses were cutting more than 11,000 jobs per week by late October. Signs of weakness in the labor market have become more apparent, drawing close attention from Federal Reserve policymakers.
ADP’s Chief Economist, Nela Richardson, stated, “The labor market has struggled to create jobs in the latter half of October.”
The so-called “small non-farm” ADP job estimates reported last week showed an increase of 42,000 jobs in October compared to September. Richardson pointed out that despite this increase, the weekly data reveals a evolving trend in recruiting, indicating further weakening in the market.
Recently, ADP began releasing weekly wage estimate data, becoming one of the key private sector data sources mentioned by policymakers.
During the current period of the US federal government shutdown resulting in official statistics being missed, the data from these private enterprises has become an important alternative source. While not a complete replacement, they can still be considered by decision-makers.
The latest data may reinforce the views of some Federal Reserve officials that the labor market is weak and warrants further lowering of the central bank’s benchmark interest rates.
The Federal Reserve has made two consecutive rate-cutting decisions at its recent meetings, reducing the policy rate by 0.25 percentage points each time. Investors are expecting another 0.25 percentage point cut at the December 9th-10th meeting.
If the temporary funding bill recently passed by the US Senate goes into effect, it is highly probable that the federal government will re-open by the end of this week. At that time, data flow from the Bureau of Labor Statistics is expected to resume before the Federal Reserve’s next meeting; however, some reports may still be missing.