Private employers cut 203,000 jobs in October

November 4th, 2009, 9:00 am · 15 Comments · posted by Jan Norman, small-business columnist

U.S. private companies, not counting farms, eliminated 203,000 jobs in October, the seventh straight month in which job losses were less than the previous month, according to the ADP National Employment Report released today.

The company also revised its September job losses to 227,000 from the 254,000 that it initially reported, said Joel Prakken, chairman of Macroeconomic Advisers LLC which compiles the monthly report based on actual payrolls of ADP clients.

The report, which does not include government jobs, is in line with economists’ expectations. The Bureau of Labor Statistics will release its October unemployment numbers Friday Nov. 6. The economists’ consensus is that report will show job losses of about 175,000, but Prakken said he expects the number to be closer to ADP’s because many government agencies and schools have been cutting jobs too.

Still, “I’m pretty confident that recovery is underway; GDP grew 3.5% in the third quarter,” Prakken said. “The recession probably ended late spring, early summer, but I still expect payroll declines through the end of the year.”

In a separate report, the outplacement firm Challenger, Gray & Christmas Inc. said companies in October announced plans to cut 55,679 jobs in the coming months, 16% fewer than in September. This report is in line with economists’ assertion that job losses will continue to slow before companies start to hire again.

“While there are still some trouble spots, the continued decline in job cutting activity across most industries is a positive sign that the economy is slowly improving,” said Chief Executive John A. Challenger.

Prakken predicted that private employers will actually start adding jobs by February, 2010, but the unemployment rate may continue to climb — peaking at 10.1% — for a while after that because companies won’t add enough jobs to exceed growth in the labor force.

The unemployment rate might not return to 5% until 2014, he said.

Job losses in October were across all industries and all sizes of business:

Firms with fewer than 50 employees: - 75,000
Businesses with 50 to 499 employees: -75,000
Companies with 500+ employees: -53,000
Goods producers: -117,000
Services: -86,000
Manufacturers: -65,000

“Small-business jobs tend to be less cyclical because they just don’t have as much labor to shed as large companies, and they often have a family structure that causes small businesses to hang on to their employees,” Prakken said. “That pattern was playing out early on in this recession but last fall there was an abrupt change in behavior by small businesses that had to do with the tightening of credit and also the realization that the holiday season was not going to provide a respite for the economy.”

He expects the small-business job market to recover sooner and stronger than at large companies.

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ocleasedlifestyle says:

November 4, 2009 at 9:27 am

I was one of them. But don’t worry the media says the worst is over!

Carlos says:

November 4, 2009 at 11:01 am

As jobloss and foreclosures continue to rise in Orange County and California, small and medium businesses are struggling for survival and most of them will close business at the end of 2010 due to high expense and low demands. Many of them will close their doors after Christmas seasons.
No Job. No Money. No Honey. No Health Insurance. No Retirement.

alphanumericone says:

November 4, 2009 at 11:24 am

It’s alright, California is adding people to the welfare payroll.

firsttimehomebuyer says:

November 4, 2009 at 11:32 am

My company is letting go of about 50 people. And the media is saying that we are OKAY?

November 4, 2009 at 11:35 am

Microsoft cutting 800 more jobs this week. That’s in addition to the 5,000 layoffs.

Microsoft had already let nearly all of the 5,000 go, in what was the company’s first-ever widespread layoffs.

Techie714 says:

November 4, 2009 at 11:38 am

Well, based on that chart it is getting better. I know I’m not supposed to say that on these boards since it’s always about doom & gloom.

Wisdom of the day: Always remember folks DEBT is your ENEMY do not let your enemies get the best of you..

ocobserver says:

November 4, 2009 at 11:54 am

oh whoooptie doo!

Only down 203,000!!!

That’s 203,000 who will have trouble paying their bills and keeping their homes and BUYING XMAS PRESENTS to jumpstart the economy!!!

Don’t get us too excited with the good news!!!

You’ll make me want to apply for a gobblement $8000 house buying credit with zero down and buy a big home that I can’t afford!!!!

Oh wait, we’ve been there and done that!!! How did that work out?? And now you say we’re doing it again???

Psychosis has set in!!!!!!!!

Say Goodbye says:

November 4, 2009 at 11:57 am

Writing is on the wall here, you can not keep a large company fuctioning in California. Im surprised I am still working, but figure it is month to month or possibly moment to moment.
I ready for a change, I can get unemployement work under the table, get free health care the and the 10% taken out of evry workers pay will give me a stimlus package. Then we all get IOU’s next year for a tax return, it does not get any better than that!
RIGHT most of you voted for it…………..Im going to save my money and ride the wave od the Democrates, WHaa Whoo

John Coktostone says:

November 4, 2009 at 11:59 am

I am expecting my pink slip this month.

Beware ! says:

November 4, 2009 at 12:06 pm

We are in a time when Sucide rate jumps so keep an eye on your friends and family. They may need support to get used to the changes, this time will pass and they will be grateful and remember.

fher says:

November 4, 2009 at 12:23 pm

203k cut and these reTARDS raise our inmcome tax. wow math 101 ftl.

November 4, 2009 at 12:42 pm

I see in Virginia and New Jersey they booted the democrat governors and elected republicans (again).

Just recylcing old manure.

Why do we only get choices from TWO PARTIES???

VOTE OUT ALL DEMS AND PUBS!!!! THEY ARE ONE AND THE SAME!

ELECT SOME REAL PEOPLE FOR ONCE WHO AREN’T JUST INTERESTED IN LINING THEIR POCKETS WITH BRIBES AND ORDERING YOU TO BE THEIR SLAVES!

sangell3 says:

November 4, 2009 at 4:00 pm

ADP is only private sector non farm jobs. I google ‘layoffs’ ever few days to see what’s in the news. Lately it has been GOVERNMENT’ employees getting laid off.

Jan Norman, small-business columnist says:

November 5, 2009 at 6:19 am

To Sangell3: Read the other comments. One says Microsoft is laying off 800, another says his own company is letting 50 people go. And our Handling Hard Times blog reported Nov. 4 that AT&T is cutting 85 jobs in O.C.

Jan Norman

November 10, 2009 at 11:29 am

You keep hearing that the economy is recovering but don’t bet on it.
Unemployment likely will remain high for the next several years because the economic recovery won’t be strong enough to spur robust hiring,
We eat out less and fast food is bad for all of us.
Live within your means and not buy into America’s consumer culture.
We don’t have to have the latest TV or gadgets to enjoy life.
Learning to live with less, and appreciating it. Recession is a good thing for our generation. Perhaps this is what we need to build a little character and downturn has taught to appreciate what they went through growing up.

Orange County Register