November private payrolls unexpectedly fell by 32,000, led by steep small business job cuts, ADP reports

[moniss]

14. It was completely predictable from the

very beginning of the tariffs. This is the sort of thing that happens. Combined with a government firing hundreds of thousands of workers that very predictably will have to curtail their spending resulting in a negative impact to the economy. Also the impact of the Federal government cutting hundreds of billions of dollars in government procurement and programs and that also predictably having a negative impact on the economy.

Small businesses always have the negative impacts reflected first because they have less capital and fewer borrowing resources to try to ride things out or adjust. So their response has to be cost cutting usually through payroll since that is typically the largest percentage cost and most immediate in effect. But to a large extent many small businesses will still head to failure and bankruptcy because cutting down to bare bones usually means that revenue will continue to decline because they don't have the staffing to handle the business. Combined with the obvious fact that their initial problem of declining revenue due to loss of sales/customers had nothing to do with "overstaffing" to begin with. But once they run to slashing staff it adds to the "dog chasing its' tail" effect of more people having less to spend and more businesses cutting back because of less spending going on.