Donald Trump just lost it. The US labor market, I mean.

Sure, you could argue hiring momentum slipped away over the summer, when Trump fired America’s chief macro statistician for the “crime” of reporting bad numbers. But headed into this week’s private sector payrolls update from ADP, one narrative suggested the slowdown might’ve ended in September, as tipped by a decent headline NFP print for that month (released on a delay by the BLS late in November).

But constructive narratives where torpedoed on Wednesday by the worst ADP headline since March of 2023, a net 32,000-job loss for the world’s largest economy. Consensus was looking for a 10,000-job gain.

October’s headline was revised slightly higher, but November’s print was the third negative readout in four months. The three-month average is now negative for the first time in five years.

ADP chief economist Nela Richardson described “choppy” conditions as employers “weather cautious consumers and an uncertain macroeconomic environment.” November’s drop, she went on, “was led by a pullback among small businesses.” Note that businesses with fewer than 50 employees shed 120,000 jobs between them last month.

Remember: This is private-sector hiring. Scott Bessent’s whole pitch revolved around the notion that Trump’s policies would “re-privatize” the US economy by, among other things, shifting the hiring impulse from government (and government-adjacent) sectors to private employers.

A year on from the election, private employers are letting people go, particularly at small businesses, the lifeblood of the economy and among Trump’s most ardent supporters. (Dear GOP-voting small business owners: The government you elect is the government you deserve.)

The ADP sector breakdown showed education and health services, along with leisure and hospitality, were the only sectors to add meaningfully to payrolls. Manufacturing dropped 18,000 employees on net.

This is a bad look for Trump, but he’ll blame someone else (Jerome Powell probably, or some nefarious conspiracy) if he mentions it at all.

A rate cut at next week’s FOMC meeting was already guaranteed, but consensus expected a “hawkish cut.” Now, the odds of the SEP, dots and Jerome Powell’s press conference demeanor skewing dovish — or at least neutral — are higher.

Not that it matters. Fed Chair Hassett’s going to have the funds rate well below neutral by this time next year.