The Federal Reserve’s rate-setting committee is set to gather next week amid fresh indications that cracks may be forming in the U.S. labor market. A report from payroll processor ADP said the private sector lost 32,000 jobs in November, led by manufacturing and business services. A month earlier, private employers added 47,000 jobs. Privately generated economic figures such as ADP’s jobs report have come under closer watch since the U.S. government shutdown, which put data gathering by federal agencies on hold. Based on Labor Department data through September, hiring has slowed this year, and the unemployment rate has ticked higher to 4.4% from 4.1% in June.

A weaker labor market and sticky inflation form a complicated backdrop for next week’s Fed meeting. With attention turning to downside risks, investors have coalesced around the likelihood that officials will cut rates next Wednesday for a third consecutive meeting, according to interest rate futures tracked by the CME Group. The central bank will also release an updated set of economic projections, which will offer clues on the path ahead for rates amid lingering price pressures. A delayed report on personal consumption expenditures on Friday is expected to show that core PCE inflation held at 2.9% year-over-year in September, according to economists polled by Dow Jones.

A new edition of PGIM’s Weekly View from the Desk addresses the outlook for policy rates, potential economic risks in 2026, and how global fragmentation might impact financial markets and the broader economy.