.ADP Estimates U.S. Companies Cut Payrolls by 473,000 (Update2)
July 1 (Bloomberg) -- Companies in the U.S. cut more jobs than forecast in June, according to a private report today, showing the labor market will be slow to improve even as other parts of the economy indicate the recession is abating.
The 473,000 drop in the ADP Employer Services gauge followed a revised reduction of 485,000 workers in May that was smaller than previously estimated.
Job losses may mount as the bankruptcies of General Motors Corp. and Chrysler LLC ripple through manufacturing. Increased firings threaten to further restrain consumer spending at a time when the world’s largest economy is showing signs of stabilizing.
“This is a weak number,” Joel Prakken, chairman of Macroeconomic Advisers LLC, said on a conference call with reporters. “It’s a pretty clear indication that, while we’re not shedding jobs as rapidly as the first part of the year, the labor market is still in a state of decline.”
Economists forecast the ADP report would show a decline of 395,000 jobs, according to the median of 29 estimates in a Bloomberg News survey. Projections ranged from decreases of 280,000 to 532,000.
A Labor Department report tomorrow may show employers cut 363,000 workers from payrolls in June and unemployment rose to a 26-year high of 9.6 percent. The increase from May’s 9.4 percent jobless rate would be the smallest since November 2008.
Fewer Announcements
The ADP report ran counter to other figures today that showed job cut announcements in June fell 9 percent to 74,393, the fewest in more than a year, from 81,755 in June 2008, according to Chicago-based placement firm Challenger, Gray & Christmas Inc.. It was the first year-over-year decrease since February 2008.
The ADP report showed a loss of 250,000 workers in goods- producing industries including manufacturers and construction companies. Employment in manufacturing dropped by 146,000. Service providers cut 223,000 workers.
Companies employing more than 499 people reduced their workforces by 91,000 jobs. Medium-sized businesses, with 50 to 499 workers, cut 205,000 jobs and small companies decreased payrolls by 177.000.
“We are still months away from a trough in employment and the resumption of net employment gains is going to have to wait until early 2010,” said Prakken. “Given that economic gains will be modest in coming quarters, I would see employment declining several more months.”
The ADP report is based on data from 400,000 businesses. ADP began keeping records in January 2001 and started publishing its numbers in 2006.
Bloomberg
The 473,000 drop in the ADP Employer Services gauge followed a revised reduction of 485,000 workers in May that was smaller than previously estimated.
Job losses may mount as the bankruptcies of General Motors Corp. and Chrysler LLC ripple through manufacturing. Increased firings threaten to further restrain consumer spending at a time when the world’s largest economy is showing signs of stabilizing.
“This is a weak number,” Joel Prakken, chairman of Macroeconomic Advisers LLC, said on a conference call with reporters. “It’s a pretty clear indication that, while we’re not shedding jobs as rapidly as the first part of the year, the labor market is still in a state of decline.”
Economists forecast the ADP report would show a decline of 395,000 jobs, according to the median of 29 estimates in a Bloomberg News survey. Projections ranged from decreases of 280,000 to 532,000.
A Labor Department report tomorrow may show employers cut 363,000 workers from payrolls in June and unemployment rose to a 26-year high of 9.6 percent. The increase from May’s 9.4 percent jobless rate would be the smallest since November 2008.
Fewer Announcements
The ADP report ran counter to other figures today that showed job cut announcements in June fell 9 percent to 74,393, the fewest in more than a year, from 81,755 in June 2008, according to Chicago-based placement firm Challenger, Gray & Christmas Inc.. It was the first year-over-year decrease since February 2008.
The ADP report showed a loss of 250,000 workers in goods- producing industries including manufacturers and construction companies. Employment in manufacturing dropped by 146,000. Service providers cut 223,000 workers.
Companies employing more than 499 people reduced their workforces by 91,000 jobs. Medium-sized businesses, with 50 to 499 workers, cut 205,000 jobs and small companies decreased payrolls by 177.000.
“We are still months away from a trough in employment and the resumption of net employment gains is going to have to wait until early 2010,” said Prakken. “Given that economic gains will be modest in coming quarters, I would see employment declining several more months.”
The ADP report is based on data from 400,000 businesses. ADP began keeping records in January 2001 and started publishing its numbers in 2006.
Bloomberg
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