On Wednesday, the U.S. ADP data, known as the "little non-farm payroll," indicated that private sector job growth was below expectations, providing new evidence of a continued slowdown in the labor market.

The U.S. ADP employment numbers for November recorded an increase of 146,000, the smallest gain since August 2024, below the expected 150,000, and the previous value was revised down from 233,000 to 184,000.

After the data release, spot gold briefly rose by $10, U.S. Treasury yields narrowed their losses, and U.S. stock index futures slightly expanded their gains. The probability of a 25 basis point rate cut by the Federal Reserve in December is 74%, consistent with the situation before the ADP data release.

By industry sector,

In November, employment in trade/transport/utilities increased

28,000, an increase of 51,000 in October; the median year-on-year wage growth rate is 4.6%, up from 4.4% in October.

In November, employment in construction increased by 30,000, following an increase of 37,000 in October; the median year-on-year wage growth rate is

5.2%, up from 4.9% in October.

In November, employment in professional/business services increased by 18,000, following an increase of 31,000 in October; the median year-on-year wage growth rate is 4.7%, compared to 4.5% in October.

Manufacturing jobs decreased by 26,000 in November, following a decrease of 19,000 in October; the median year-on-year wage growth rate is

4.7%, up from 4.5% in October.

In November, employment in the financial services sector increased by 5,000, following an increase of 11,000 in October; the median year-on-year wage growth rate is 5.0%, compared to 4.9% in October.

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

Weaker-than-expected job growth may reinforce the Federal Reserve's expectations for a rate cut in December, thereby dampening the enthusiasm of dollar bulls. However, it is worth noting that the changes in the ADP data can be quite volatile and may be revised in the following months.

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

Additionally, ahead of Friday's non-farm data, investors may pay more attention to Federal Reserve Chairman Powell's speech at 2:45 AM the next day. Powell made hawkish remarks in his last speech in November, stating that the Federal Reserve is not in a hurry to cut rates in a strong economy. Following these remarks, bets on a Fed rate cut in December sharply decreased. Analysts pointed out that if Powell were to "hawk" again, it could strengthen the dollar and trigger a new wave of gold selling.

Bank of America expects that due to the impact of storms in the Southeast and the Boeing strike, the non-farm payroll data will be noisy. The institution's expectation is for 240,000 new jobs in November, above market consensus, of which 100,000 jobs are attributed to reversals from the impact of storms and strikes. "We recommend a cautious stance on the initial non-farm data," wrote Bank of America.

The market expects the Federal Reserve to cut rates again at the conclusion of its meeting on December 18. However, Bank of America stated that if the consumer price index announced before the meeting shows a significant monthly increase, then the "Federal Reserve may find it difficult to maintain the rate cut stance."