A Cruel September for Private Sector Jobs, With 39,000 Cut
The lone bright spot in ADP's report: August's private employment total was revised to a gain of 10,000 jobs, rather than the previously estimated loss of 10,000. Private employers added 32,000 jobs in July and 26,000 jobs in June.
September's job decline "confirms a pause in the economic recovery already evident in other data," ADP said. A deceleration of employment occurred in all major sectors, ADP added.
Separately, private placement firm Challenger, Gray & Christmas said planned layoff announcements by U.S. employers rose 7% to 37,151 in September from 34,768 in August, Reuters reported Wednesday. However, this September's jobs cuts were down 44% compared to September 2009's 66,404. Year-to-date, jobs cuts are down 64% compared to the first nine months of 2009. So far in 2010, employers have announced 411,272 layoffs, down from 1.13 million in the same period of 2009.
Construction's Deep Slide Continued
ADP report's shows that job were cut across the board. By business size (large, medium, small) losses were 11,000, 14,000 and 14,000, respectively.
In September, construction employment declined 28,000, bringing the total number lost since the January 2007 peak to 2.3 million. Financial services lost 13,000 jobs. The goods-producing sector lost 45,000 jobs. And manufacturing lost 17,000 jobs -- the latter being the sector's third straight monthly decline. On the positive side, services added 6,000 jobs -- that sector's eighth straight monthly gain.
Given the labor market's poor progress, policymakers will likely remain focused on job creation. The U.S. economy needs to create 100,000 to 125,000 jobs to keep the U.S. unemployment rate, currently a very high 9.6%, from rising again.
Investors should also keep in mind that the more-telling job statistic, containing both private and public sector job data, is the U.S. Labor Department's monthly nonfarm payroll report, and the September data will be released Friday, Oct. 8 at 8:30 a.m. ET. That report is now expected to show essentially no overall change in jobs last month. However, a Bloomberg survey of economists expects the Labor Department report to show a gain of 77,000 private sector jobs, after a loss of 54,000 jobs overall and a gain of 67,000 private sector jobs in August.