The likelihood of interest rate cuts is increasing! ADP weekly report: Over the past four weeks, job losses in the U.S. private sector have intensified.

On Tuesday, ADP weekly data showed more signs of weakness in the U.S. labor market, with layoffs accelerating over the past four weeks. Over the past four weeks, private companies cut an average of 13,500 jobs per week, much higher than the previous update a week ago, which showed a weekly loss of 2,500 jobs—a clear acceleration in the pace of layoffs.

ADP’s Nela Richardson said: “With the holiday hiring season approaching, consumers’ spending power remains in question. This may lead to delayed or slower employment growth.”

Due to the previous U.S. government shutdown, which is still affecting data releases, alternative indicators such as ADP are filling information gaps in the economic picture. Government agencies like the Bureau of Labor Statistics (BLS) and the Bureau of Economic Analysis (BEA) have published adjusted release schedules, but key data, such as the monthly nonfarm payroll report, will not be released until December.

Federal Reserve policymakers will meet again on December 9–10, but will lack much of the usual data they rely on for their forecasts. However, several officials have recently called for further interest rate cuts, shifting market expectations—in general, a rate cut is now widely anticipated at next month’s meeting.

Jan Hatzius, Chief Economist at Goldman Sachs, said in a report to clients on Sunday:

Since the next jobs report will be released on December 16 and CPI will be released on December 18, there are virtually no factors on the schedule that could prevent a rate cut on December 10. We expect the Fed to cut rates in December and to cut rates by a further 25 basis points twice in 2026.

Alternative indicators are expected to show a renewed decline in October employment, although the BLS reported last week that nonfarm payrolls in September rose by a better-than-expected 119,000 jobs.

Financial blog Zerohedge commented on the latest ADP data, saying this is certainly not good news, but it does tilt the internal Fed debate between doves and hawks toward supporting rate cuts, increasing the likelihood of a December cut. However, are these bad news enough to support a “Santa Claus rally”?

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