August job losses lowest in 11 months, ADP says

September 2nd, 2009, 8:00 am · 10 Comments · posted by Jan Norman, small-business columnist

Private employers cut 298,000 jobs in August, the smallest employment decline since September, 2008, according to payroll giant ADP.

The steady decline in U.S. jobs will probably bottom out by December and start to grow again in 2010, said Joel Prakken, chairman of Macroeconomic Advisers LLC, which prepares the monthly report ahead of the government jobs numbers on Friday.

August job losses were in all sizes of businesses and industry sectors. But the trend is clear, Prakken said. “From monthly losses averaging 700,000 in the first quarter, to 500,000 to 600,000 in the second quarter to 300,000 now, the losses are diminishing.”

Here is the job trend for small, medium and large businesses since 2003 (click on image for a larger view):

Source: ADP

Prakken expects small businesses to be the first to show actual job growth. “In past recessions small business employment has not been as cyclical. It doesn’t slow as much and recovers earlier,” he said. “I expect that this time as well.

ADP’s report is based on actual payrolls at its 570,000 client companies. Here are its estimates of job losses by size and sector:

Businesses with fewer than 50 employees: -122,000
Businesses with 50 to 499 employees: -116,000
Businesses with 500+ employees: -60,000
Goods producing companies: -152,000
Service providers: -146,000
Manufacturers: -74,000
Construction: -73,000
Financial services: -19,000

“There is plenty of encouraging data in construction on the activity side (housing starts, sales and prices rising),” Prakken said, “but employment hasn’t participated yet.”

ADP’s monthly job cuts were 48,000 higher than economists had expected, which Prakken called disappointing but not statistically significant.

He also predicted that the Bureau of Labor Statistics August employment report on Friday, Sept. 4, will be a little higher than the 220,000 economists expect. The BLS includes government jobs, which is why it varies from ADP’s.

Click here to read ADP’s National Employment Report for August.

Click here to read ADP’s Small Business Report for August.

A separate report that affirms ADP’s showing of slowing layoffs comes from Challenger Gray & Christmas, an outplacement firm. It tracks company announcements of future layoffs, and August announced layoffs were down 14% from a year earlier.

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Gary Munson says:

September 2, 2009 at 8:36 am

I’m sorry. I just can’t get excited about this news. I still have a job but my hours have been cut in half. There are many that are in the same boat I am. How about this Obamanomics ? They seem to be failing at every turn.

Techie714 says:

September 2, 2009 at 10:46 am

Gary, sounds like your bias politics are creeping into your post. I’m no Obama fan but honestly I dont think their is much he can do to “save” the economy. Eventually it will have to correct itself. But I dont blame him for this & neither should you.

nijode says:

September 2, 2009 at 10:04 am

Gary you are so right. And Obama has has yet to cure cancer or bring peace to the middel east. What is this guy waiting for? Hey Gary, maybe there is another reason your hours have been cut?

rants says:

September 2, 2009 at 10:37 am

leave it to the corporate/ government media machine to
somehow spin the loss of 298000 jobs as a good sign-
did they mention the salary cuts and fall in hours worked
by those that are still “employed”- and excuse me but
where exactly are the new jobs that they are forcasting going
to come from again? were they predicting the job losses back
in 2007? hellll no clueless

http://market-ticker.denninger.net/archives/1397-A-Warning-To-America-From-The-East.html

uncle bill says:

September 2, 2009 at 11:22 am

Happy days are here again…..

Don’t blame Obama Gary…he’s only been in office for 9 months and increased debt 2 fold, raised taxes and is trying to push through healthcare reform majority of people don’t want…. this is all George Bushs fault!

There is absolutely nothing he could have done differently to help the economy…..

gareeyph says:

September 2, 2009 at 11:36 am

Obama is proving to be a total disaster. He ran as a moderate and is now showing his far left agenda to Americans, who are soundly rejecting his proposals. What a shame.

Josh says:

September 2, 2009 at 11:59 am

Yeah, Americans who think healthcare reform means all senior citizens will be put to death if they sniffle, that there are only 6 MRI machines in Canada, and that the government is going to take control of everyone’s bank account and just start taking money out.

And what makes you think he ran as a moderate? You must have slept through the campaign. Healthcare reform was the centerpiece of his platform.

Gulliver says:

September 2, 2009 at 11:46 am

I’ve had a 10% paycut, been through 2 rounds of layoffs, and another on the way. This economy continues to crumble but I would love to hear where these economists expect the job recoveries to be. All I see while driving are increased strip mall vacancies, bank owned signs, and homeless people at every corner.

gdb says:

September 2, 2009 at 1:38 pm

yep, americans love our healthcare system! if you can afford coverage you get access, and if you can’t screw you. what could be more american than that? never mind that the people with coverage pay for their own healthcare, plus the healthcare of people who can’t afford it PLUS the marketing and bonus expenses for the insurance companies. clearly this is the best and most efficient way! that’s why every other industrialized nation does it this way–it is superior on its face. you have to be a deranged librul to think there is a better way. sure there is room for improvement–we need to deregulate insurance markets so we can do to healthcare what we did to financial markets, energy markets and the airlines. americans love deregulation. the rich make out and the poor get screwed–i swear we should print that on our money it is so quintessentially american. america wants bush policies. that’s why we voted for obama. hope he realizes this soon.

ed says:

September 20, 2009 at 11:09 am

With 12.2% already unemployed there will continue to be less jobs lost. If you don’t have a job it’s hard to lose it.

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