Ray of light: ADP reports 'only' 169,000 private sector job cuts in November

More progress on the U.S. employment front, as the private sector cut just 169,000 jobs in November, following a downwardly revised 195,000 job loss in October, according to data compiled in the ADP National Employment Report. The initial October job loss estimate was 203,000. Economists surveyed by Bloomberg News, however, had expected private employers to cut 150,000 jobs in November.

Separately, private placement firm Challenger, Gray & Christmas said job cut announcements by U.S. employers fell to 50,349 in November, down 9.6% from 55,679 in October, CNMoney.com reported Wednesday.

Also, ADP notes that the 169,000 private payroll cutback was the eighth straight monthly decline, and the smallest monthly total since May 2008. Nevertheless, "although overall economic activity is stabilizing, employment usually trails economic activity, so it is likely to decline for at least a few more months." ADP adds. The job loss totals in November by business size were 44,000 (large), 57,000 (medium), and 68,000 (small).

Further, the services sector -- formerly a U.S. strength during the recent economic expansion -- lost 81,000 jobs. The goods-producing sector cut 88,000 and manufacturing shed 44,000. The construction sector also lost 44,000, its 34th consecutive monthly decline, and brought total construction jobs lost since the January 2007 peak to 1.72 million. Financial services saw a job loss of 17,000, its 24th consecutive monthly decline.

Investors should monitor monthly job reports because job creation is positively correlated with corporate revenue and earning gains. And as corporate earnings go, so goes the U.S. stock market.

Economic Analysis: Another decent decline in monthly job loss totals, with November's report roughly in-line with the consensus estimate. A pessimist would see a U.S. economy that's still losing jobs, but an optimist would see the continuing downtrend in job layoffs, which ADP notes. The report also bodes well for Friday's more telling jobs statistic, containing both private and public sector job data, the U.S. Labor Department's monthly nonfarm payroll report. The November data will be released Friday, Dec. 4 at 8:30 a.m. EST. That report is expected to show a 100,000-job decline in November after a 190,000 loss in October, according to a Bloomberg News survey.

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