Small businesses lost 120,000 jobs in November, ADP data shows

Small businesses More than 100,000 jobs were lost in November due to economic uncertainty, according to the latest ADP report on private sector payrolls.

ADP’s November employment report showed that private sector companies cut a total of 32,000 jobs in November. The decline was led by small businesses, which 120,000 jobs lost in November, while medium-sized companies (defined as between 50 and 499 employees) created 51,000 jobs and large companies added 39,000 jobs to offset some of the monthly decline.

ADP chief economist Nela Richardson noted that hiring “has been choppy lately as employers cope with cautious consumers and an uncertain macroeconomic environment,” adding that “the November slowdown, while broad-based, was led by a pullback among small businesses.”

Small businesses face uncertainty about the economy, which is showing signs of a cooling labor market and persistent inflation, even as economic growth data remains resilient amid the AI ​​boom. Unlike larger companies, smaller companies are particularly sensitive to changing economic trends and policy changes such as higher tariffs.

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“I think a big part of this is the rate situation. We have been through this year where rates for different countries have continued to fluctuate and change almost on a dime and rapidly. Companies don’t like tariffs, but they don’t like uncertainty even more, so they’re trying to figure out what prices will be in the next six months to a year,” he said.

ADP’s report showed declines in both the goods-producing and service sectors. In the services sector, professional and business services lost 26,000 jobs and information services lost 20,000, while education and health care added 33,000.

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Tariffs are taxes on imported goods paid by importers who often pass the higher costs on to consumers through higher prices. (Brandon Bell/Getty Images)

Among the goods producing industries is production companies lost 18,000 jobs and construction 9,000 – while natural resources and mining companies created 8,000 jobs.

Manufacturers face tariffs due to higher costs for intermediate goods they use to produce final products sold in the U.S. exported to foreign markets.

“The assumption with most tariffs is that these are finished products, which are what most people think about, and so if you prevent those finished products from coming into the U.S., people will buy those products from producers here in the United States,” Higgins said. “The problem is that’s not really the case. Often it’s the raw materials that come in and that’s what the manufacturers use.”

He had taken note of the steel tariffs from the beginning Trump term for example, because they promoted employment in steel production but had the effect of damaging employment in other production facilities dependent on imported steel.

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Small business owners have faced uncertainty in 2025 due to rate shifts and other policy changes. (iStock)

Hansen noted that the trade group, which represents small and independent businesses, has seen small businesses trying to hire struggle to find qualified workers.

He added that uncertainty has created challenges for small businesses throughout the year, with uncertainty peaking around periods of substantial transition, such as the president’s tariff announcements in April.

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“It’s not just a company that’s uncertain about its future and then a little bit reluctant to invest. I think it’s a company that’s selling to people who are a little bit uncertain,” Hansen said.