On Wednesday, the USA ADP data, known as the "little non-farm", showed that private sector employment growth fell short of expectations, providing new evidence of a continuing slowdown in the labor market.

In November, the USA ADP employment numbers recorded an increase of 0.146 million people, the smallest increase since August 2024, lower than the expected 0.15 million, and the previous value was revised down from 0.233 million to 0.184 million.

After the data was released, spot gold rose 10 dollars in the short term, US Treasury bonds narrowed their losses, and USA equity index futures slightly expanded their gains.

By industry,

In November, trade/transportation/utilities employment increased by 0.028 million, up from 0.051 million in October; the median year-on-year wage growth rate was 4.6%, compared to 4.4% in October.

In November, construction employment increased by 0.03 million, up from 0.037 million in October; the median year-on-year wage growth rate was 5.2%, compared to 4.9% in October.

In November, professional/business services employment increased by 0.018 million, up from 0.031 million in October; the median year-on-year wage growth rate was 4.7%, compared to 4.5% in October.

In November, manufacturing employment decreased by 0.026 million people, following a decrease of 0.019 million in October; the median annual salary growth rate was 4.7%, compared to 4.5% in October.

In November, employment in the financial services industry increased by 0.005 million people, after an increase of 0.011 million in October; the median annual salary growth rate was 5.0%, compared to 4.9% in October.

ADP Chief Economist Nela Richardson stated that despite healthy overall growth this month, performance across the industry was mixed. Manufacturing performance was the weakest since spring. Financial services, leisure, and hospitality sectors also showed weakness.

Weaker-than-expected job growth might solidify expectations for a rate cut by the Fed in December, thereby dampening the enthusiasm of dollar bulls. However, it is worth noting that changes in ADP data can be very volatile and may be revised in the following months.

Forex analyst Adam Button mentioned that the market did not react much to the ADP data, partly because it was in line with market trends, and partly because this survey has a poor track record in predicting non-farm employment data.

Moreover, ahead of Friday's non-farm data, investors might focus more on the speech by Fed Chairman Powell at 2:45 a.m. the next day.

Bank of America expects that the release of job data will be noisy due to the impact of storms in the southeast and the boeing strike. The institution's forecast predicts 0.24 million new jobs for November, higher than the market consensus, of which 0.1 million jobs are created due to reversals caused by storms and strikes.

"We suggest maintaining a cautious attitude towards the preliminary values of non-farm data," wrote Bank of America.

The market expects that the Federal Reserve will cut interest rates again at the end of the meeting on December 18. However, the bank of america stated that if there is another significant monthly increase in the consumer price index announced before the meeting, then "the Federal Reserve may find it difficult to maintain its rate cut."

Editor / jayden