Posted on 05 Aug 2009
According to a national employment report published Wednesday by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers, private-sector jobs in the U.S. fell 371,000 in July, indicating that perhaps the pace of layoffs is easing.
The expected loss was about on par with the 350,000 drop in the ADP survey projected by economists in a Dow Jones Newswires survey.
The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics' nonfarm payroll data, to be released Friday, includes government workers. Economists surveyed by Dow Jones Newswires expect the Bureau of Labor Statistics will report July job cuts totaling only 275,000, about half the loss of 467,000 reported in June. The July unemployment rate is projected to rise to 9.7% from 9.5% in June.
Economists think that economic output may have stopped contracting in the second quarter, but any turnaround in the labor markets is still months away.
Joel Prakken, chairman of Macroeconomic Advisers, noted that the decline was the smallest since October 2008, but added, "Despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months, albeit at a diminishing rate."
The latest ADP report showed large businesses with 500 employees or more shed 74,000 jobs and medium-size businesses lost 159,000 workers last month. Small businesses that employ fewer than 50 workers cut 138,000 jobs in July.
Service-sector jobs fell 202,000 in July, while factory employment dropped 99,000.
ADP, of Roseland, N.J., says it processes payments of one in six U.S. workers, while Macroeconomic Advisers, based in St. Louis, is an economic consulting firm.
In another Wednesday job report, TrimTabs Investment Research estimated that job losses accelerated last month, with 488,000 workers laid off in July, worse than the ADP estimate. TrimTabs uses daily income-tax withholdings to the U.S. Treasury to estimate changes in employment.
"While Wall Street is convinced the recession is over, the economy continues to shed jobs at an alarming rate," said Charles Biderman, chief executive of TrimTabs.
Also on Wednesday, outplacement firm Challenger Gray & Christmas said that the number of layoffs announced by U.S. companies jumped 31% in July to 97,373. Challenger said that so far this year, employers have announced 994,048 job cuts, 72% more than the 579,260 announced in the first seven months of 2008.