Posted on 04 Nov 2009
The pace of layoffs eased in October, but progress in the labor markets remains painfully slow. Private-sector jobs in the U.S. fell 203,000 last month, according to a national employment report published Wednesday by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.
Separately, U.S. service sector growth slowed in October, amid more lost ground in hiring.
The ADP loss is right on par with the drop projected by economists in a Dow Jones Newswires survey. The estimated change of employment from August to September was revised by 27,000 from a decline of 254,000 to a decline of 227,000.
The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics' nonfarm payroll data, to be released Friday, include government workers.
Economists surveyed by Dow Jones expect the BLS to report October job cuts totaling 175,000, down from 263,000 jobs lost in September. The October unemployment rate is projected to rise to 9.9% from 9.8% in September.
The U.S. economy posted annualized growth of 3.5% for the third quarter. That pace is usually high enough to generate jobs. But businesses have been focused on productivity, not new hires, to increase output. Economists think output per hour worked surged at an annual rate of 7% last quarter. Productivity data will be released Thursday.
Joel Prakken, chairman of Macroeconomic Advisers, said, "Despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least a few more months."
The latest ADP report showed large businesses with 500 employees or more shed 53,000 jobs and medium-size businesses lost 75,000 workers in October. Small businesses that employ fewer than 50 workers also cut 75,000 jobs, the smallest total since July 2008.
Service-sector jobs fell 86,000, and factory jobs dropped 65,000.
The job outlook for manufacturing brightened Monday after the Institute for Supply Management reported its factory employment index rose to 53.1 in October from 46.2 in September. A reading above 50 indicates expansion.