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Nov-04-2009us job growth seen in early 2010-Macro Advisers(topic overview)
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The U.S. labor market is still on the receiving end of the worst recession since the Great Depression, as employers continue to layoff workers in a bid to save some costs and survive the ongoing economic weakness, as today the ADP employment report signaled that the bleeding in the labor market continues. The ADP employment report showed that private employers shed in October 203,000 jobs following the prior revised 227,000 lost jobs reported back in September and slightly below median estimates of -198,000 lost jobs, as this further indicates that the labor market continues to pose threats to the ongoing economic recovery, as employers continue to reduce their workforce. The labor market has been so far the major concern over the past few months, as unemployment rose to a 26-year high at 9.8% in September and is still expected to rise further over the upcoming few months and will probably exceed 10% before the end of this year, and that should add further pressures on the ongoing recovery, as income growth and accordingly consumer spending will be affected negatively. [1] The ADP national employment report showed 203,000 jobs were lost in the U.S. private sector in October, more than the Reuters forecast for a loss of 190,000 jobs. It was the fewest number of jobs lost reported by ADP since July 2008.[2] The decrease in private sector jobs was the smallest since July 2008, and marks the seventh consecutive month of declines in job losses, the ADP National Employment report showed. The report also revised its estimates of September job loss, estimating that 227,000 had been lost, 27,000 fewer than its previous estimate.[3]
Private employers shed 203,000 jobs in October. It was the smallest decline since July 2008, according to the ADP Employment Report. It also was the seventh straight monthly of smaller job losses after those losses peaked at 736,000 in March.[4]
The services sector survey was released short after payrolls firm ADP reported the U.S. private sector shed 203,000 jobs in October, the seventh month in a row that employment declines were smaller than in the previous month.[5] U.S. private employers shed 203,000 jobs in October, fewer than a revised 227,000 jobs lost in September, a report by a private employment service said on Wednesday.[6] In other U.S. data on Wednesday, private sector companies reduced jobs in October at the slowest pace in more than a year, shedding 203,000 positions, fewer than a revised 227,000 jobs lost in September, according to the ADP Employer Services LLC report.[7]
The ADP Small Business Report is a monthly estimate of private nonfarm employment among companies in the United States with 1-49 employees and is a subset of the ADP National Employment Report. The data for both reports is collected for pay periods that can be interpolated to include the week of the 12th of each month, and processed with statistical methodologies similar to those used by the U.S. Bureau of Labor Statistics to compute employment from its monthly survey of establishments. Due to this processing, this subset is modified to make it indicative of national employment levels; therefore, the resulting employment changes computed for the ADP National Employment Report are not representative of changes in ADP's total base of U.S. business clients.[8] The matched sample used to develop the ADP National Employment Report was derived from ADP data, which during the twelve month period through June 2009, averaged approximately 400,000 U.S. business clients and represented over 23 million U.S. employees. This approximately represents the size of the matched sample used this month.[8]
Washington, November 4 - U.S. companies lost 203,000 jobs in October according to the ADP National Employment Report out today, more than the 190,000 economists were expecting.[9] Just call it a month in which the private-sector job market treaded water: It lost 203,000 jobs in October, following a revised 227,000 reduction in September, according to data compiled in the ADP National Employment Report. September's original loss estimate was 254,000.[10] Private employment decreased by 203,000 between September and October, continuing a seven-month trend of easing job loss, according to the ADP National Employment Report.[11]
The average absolute miss between ADP and private nonfarm payrolls since December has been 98,000. The government releases its official October employment report on Friday, and the median expectation is for 175,000 lost jobs.[9] The ADP figures are seen by some analysts as a proxy for the government's closely watched report on nonfarm payrolls. The Labor Department will release its October labor report, which also includes government jobs, on Friday at 8:30 a.m. EST. Payrolls likely shrank by 175,000 in October vs. a 263,000 decline the previous month, analysts say.[12]
Labor news will figure prominently today, with the Challenger Job Cut Report and the ADP Employment Report, but the first report of the day will be MBA Purchase Applications at 7 a.m. ET. I generally look only at the purchases because they reflect new activity, as opposed to refinancing.[13] NEW YORK, Nov 4 (Reuters) - The U.S. job market will likely start to grow in early 2010, as signs of economic expansion should encourage companies to hire workers, said Macroeconomic Advisers LLC chairman Joel Prakken. He cautioned the labor market will remain sluggish for a protracted period with full employment unlikely to be reached until 2014.[14] NEW YORK, Nov 4 (Reuters) - U.S. companies reduced jobs in October at the slowest pace in more than a year, suggesting some stabilization in the labor market as the economy emerges from recession, a report on on Wednesday showed.[6]
NEW YORK, Nov 4 (Reuters) - The U.S. services sector, which represents about 80 percent of U.S. economic activity, grew for the second consecutive month in October, while the labor market also showed signs of improvement in data published on Wednesday.[7] The U.S. labor market worsened further in October, revealing the private sector cut 203,000 jobs, the Automatic Data Processing Inc reported Wednesday.[15] The ADP survey, a snapshot of nonfarm private employment that offers a clue on the direction of the U.S. labor market, comes ahead of Friday's official October labor market data, expected to show the unemployment rate rising to 9.9 per cent.[16]
Peter Boockvar, equity strategist for Miller Tabak said, "The markets will await Friday's number before drawing conclusions on the labor market, but today's report still reflects a tough environment for jobs, albeit less so." Friday morning, the Labor Department is scheduled to release its report on the employment situation in the month of October.[17]
The report, which includes government jobs, is expected to show that employment fell by about 175,000 jobs. While this would reflect a slower pace of decline than the loss of 263,000 jobs reported for September, the unemployment rate is still expected to edge up to a new twenty-six year high of 9.9 percent.[17] The report also showed that construction employment fell by 51,000 jobs in October, marking the thirty-third consecutive monthly decline.[17] ADP added that employment in the financial services sector fell by 18,000 jobs, the twenty-third consecutive monthly decline.[17]
In October, construction employment dropped 51,000. - 33rd consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,675,000.[18] The goods-producing sector slashed 117,000 jobs and manufacturing shed 65,000 positions. The construction sector eliminated 51,000 jobs, its 33rd consecutive monthly decline, and brought total construction jobs lost since the January 2007 peak to 1.7 million.[10] Employment in the goods-producing sector dropped by 117,000 and manufacturing shed 65,000 jobs. The construction industry lost 51,000 jobs, its 33rd consecutive month of job losses. Since its peak in January 2007, the construction industry has lost 1.7 million jobs.[11]
NEW YORK, Nov 4 (Reuters) - U.S. government securities prices trimmed losses on Wednesday after a report showed more U.S. private sector job losses in October than forecast.[2] The U.S. economy lost 203,000 private sector jobs in October, a survey showed on Wednesday, indicating deterioration in the labour market will persist even as the economy returns to growth.[3]
One of the ironies of the U.S. economy is that as it becomes more productive per employee, it takes fewer and fewer employees to perform the same tasks. This has the effect of reducing job gains and lengthening the recovery time to full employment. That makes the task of policymakers and executives more difficult. They must remain focused on job creation: The U.S. economy needs to create 150,000 to 200,000 jobs every month to lower unemployment.[10] Private-sector jobs in the U.S. fell 203,000 last month, according to a national employment report published Wednesday by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.[19] The ADP National Employment Report, created by Automatic Data Processing, Inc. (ADP) : ]] , in partnership with Macroeconomic Advisers, LLC : ]] , is derived from actual payroll data and measures the change in total nonfarm private employment each month.[8] According to Joel Prakken, Chairman of Macroeconomic Advisers, LLC, "Nonfarm private employment decreased 203,000 from September to October 2009 on a seasonally adjusted basis, according to the ADP National Employment Report.[8]
ROSELAND, NJ -- (Marketwire) -- 11/04/09 -- According to today's ADP National Employment Report : ]] , private sector employment decreased by 203,000 in October.[8] Nonfarm private employment decreased 203,000 from September to October 2009 on a seasonally adjusted basis, the latest ADP National Employment Report shows.[18]
To obtain additional information about the ADP National Employment Report, including additional charts, supporting data and the schedule of future release dates, or to subscribe to the monthly e-mail alerts and RSS feeds, please visit www.ADPemploymentreport.com :.[8] For a description of the underlying data and the statistical properties of the series, please see "ADP National Employment Report: Development Methodology" at ADPemploymentreport.com/methodology.aspx : .[8]
Due to the important contribution small businesses make to economic growth, employment data that is specific to businesses with fewer than 50 employees will be reported in the ADP Small Business Report : each month.[8] Additional information about small business employment, including charts on monthly job growth and employment levels, along with historical data, is available at www.smallbusinessreport.adp.com : . "Employment among small-size businesses, defined as those with fewer than 50 workers, declined 75,000 in October.[8]
Private employment among small businesses : decreased by 75,000 in October, according to the ADP Small Business Report released today.[8]
Prakken added, "October's ADP Report estimates nonfarm private employment in the service-providing sector fell by 86,000.[8] The report showed that non-farm private employment fell by 203,000 jobs in October following a revised decrease of 227,000 jobs in September.[17] Although the report showed growth in the sector, analysts were disappointed in the employment index, which fell to 41.1 in October from 44.3 in September. "It's disappointing that it didn't hit the consensus number but the good news is that the index stayed above 50," said John Canally, economist, with LPL Financial in Boston.[7] "New orders are very strong for two months in a row and inventories are being restocked. The big disappointment is the employment number which dropped as opposed to the manufacturing sector index earlier this week." The report was roughly in line with surveys in Europe earlier on Wednesday suggesting service sector activity expanded at its fastest in 22 months in October in the euro zone, and in Britain at its briskest since August 2007, when the global credit crunch struck.[7]
Despite recent indications that overall economic activity is stabilizing, ADP said that the employment is likely to decline for at least a few more months. The continued drop in employment in October reflected weakness in both the service-providing and goods-producing sectors.[17] ADP, a payroll services firm, said that despite decelerating job loss, overall employment is likely to decline for "at least a few more months."[11] Construction employment continues to be under siege as payrolls declined 51,000 and brought the total decline in construction jobs to 1.675 million workers.[20]
Employment in the goods-producing sector declined 117,000, with employment in the manufacturing sector dropping 65,000." "Large businesses, defined as those with 500 or more workers, saw employment decline by 53,000, while medium-size businesses with between 50 and 499 workers declined 75,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 75,000," said Prakken.[8]
Details of the ADP report look a little promising in the near term but the future may not be so bright. Small businesses, defined as firms with less than 50 workers, saw their lowest level of declines (-75,000 workers) since July 2008.[20]
The median of estimates from economists surveyed by Reuters for the ADP Employer Services report, jointly developed with Macroeconomic Advisers LLC, was a decline of 190,000 private-sector jobs last month.[6] Economists expected ADP's report, jointly developed with Macroeconomic Advisers, to show an October decline of 198,000 private-sector jobs.[4]
The ADP revised downward the October number of job losses, to a decline of 227,000 from the prior estimate of 254,000.[16] The pace of private job losses has slowed since the 736,000 drop in March, according to ADP data.[6] The ADP survey added support to indications that job losses are slowing as the economy pulls out of steep recession that began in December 2007.[16] Job losses were reported through out all sectors of the economy showing the service-providing sector fell by 86,000, while the goods producing sector and the manufacturing sector fell by 117,000 and 65,000, respectively.[15]
The October ADP reading was slightly worse than the 198,000 job losses expected by most analysts.[16] Since the recession started, U.S. job losses have risen from 7.6 million to 15 million.[21]
The services sector -- formerly a U.S. strength during the recent economic expansion -- lost 65,000 jobs in October.[10] The U.S. services sector, which makes up most of the nation's economy, expanded in October for the second month in a row but at a slower pace, the latest survey shows today. The Institute of Supply Management said its non-manufacturing index dipped to 50.6% last month, after 50.9% in September.[5]
Consumer spending accounts for nearly 2/3 of economic activity in the United States, whereas rising unemployment alongside tightened credit conditions will probably continue to weigh down on economic growth, and accordingly, we shouldn'''t expect the economy to be able to grow over a strong pace but over a gradual pace. The U.S. economy grew by 3.5% during the third quarter according to the advanced GDP estimate, however it'''s widely expected that the economy will slowdown during the fourth quarter of this year, as the effects of the government'''s fiscal stimulus starts to fade.[1] Economic activity in the U.S. non-manufacturing sector expanded in October for the second consecutive month, say the nation's purchasing and supply executi.[18]
Earlier, a separate report showed planned layoffs by U.S. companies in October slowed for a third consecutive month to a 19-month low of 55,679. At 10 a.m. EST, the Institute for Supply Management will release its non-manufacturing survey for October.[4] An ISM manufacturing survey published on Monday showed that factory activity expanded in October for the third consecutive month.[5] The national survey of purchasing and supply executives found that non-manufacturing business activity edged up 0.1 percentage point to 55.2%, the third consecutive month of growth since September 2008.[5]
The dip in service sector growth contrasted with ISM's index of manufacturing activity. It climbed 3.1 points to 55.7, the fastest rate of growth in more than three years.[12] Separately, U.S. service sector growth slowed in October, amid more lost ground in hiring.[19]
Non-farm private employment in the service sector fell by 86,000 during the month.[11] Employment in the services sector declined for the 18th month and at a faster pace in October, the ISM said.[5]
According to the ADP employment report, payrolls declined 203,000 in October compared to a decline of 227,000 in September. [20] Economic Analysis: Basically, the ADP October report on private-sector employment came in about as expected.[10]
Employment usually trails overall economic activity, so losses are likely to continue for at least a few more months, but at a diminishing rate," said Joel Prakken.[8] Employment losses among small-size businesses were the smallest since July of 2008.[18]
Large businesses cut 53,000 jobs in October, while employment at medium-size businesses fell by 75,000 jobs.[17] Separately, job-placement firm Challenger, Gray & Christmas said job cut announcements by U.S. employers fell to 55,679 in October, 16 percent lower than in September, CNMoney.com reported Wednesday.[10] Economists surveyed by Bloomberg News had expected private employers to cut 200,000 jobs in October.[10]
The national payroll processing company only estimates private sector jobs, not government jobs.[9] Adding in the roughly 15,000-to-20,000 jobs government tends to create each month, the report suggests total non-farm payrolls (government and private) will fall about 188,000 in October.[9]
The ADP figures are seen by some analysts as a proxy for the government's closely watched report on nonfarm payrolls. The Labor Department will release its October labor report on Friday at 8:30 a.m. Eastern.[4] The ADP report was originally designed as a leading indicator of the Bureau of Labor Statistics national unemployment report.[20] In early 2009 the ADP report was reintroduced as a statistical estimator of the final BLS unemployment report.[20]
The benchmark U.S. 10-year Treasury note US10YT=RR, down 15/32 before the ADP report came out, was down 13/32 afterwards.[2] The data from the ADP report and the BLS report used to be highly correlated, but during the latest recession the numbers became decoupled.[20]
Prakken was speaking on a conference call with reporters after the release of the October ADP Employer Services report, jointly developed with Macroeconomic Advisers.[14]
ADP noted that the 203,000 private payroll cutback was the seventh straight monthly decline.[10] The ADP does a better job of projecting the final BLS payroll data than the original data.[20] While the pace of payroll declines has been steady over the last few months, an overall drop of over 200,000 jobs is still very depressing.[20] September's decline was revised to 227,000 jobs from the initial report of 254,000.[4] Investors should monitor monthly job reports because job creation is positively correlated with corporate revenue and earning gains.[10] The upward revision and the somewhat stable report may prove Friday's job report will be better than expected.[15] Economists had expected a loss of 198,000 jobs compared to the decrease of 254,000 jobs originally reported for the previous month.[17] The job loss totals in October by business size were: 53,000 (large), 75,000 (medium), and 75,000 (small).[10] Job creation also is the key to consumption, which contributes greatly to U.S. GDP. However, given a decade of overconsumption and stagnant incomes in many job classifications, few economists expect spending patterns to return to the home equity/refinance-distorted, cash-flush years of the housing bubble. Many economists do expect both consumer spending and business investment to trend slightly higher in the quarters ahead.[10]
The service-providing sector lost 86,000 jobs, while the goods-producing sector cut 117,000 jobs, including 65,000 jobs in the manufacturing sector.[17] Small businesses also lost 75,000 jobs, marking the smallest drop in small businesses jobs since July of 2008.[17] Large businesses shed 53,000 jobs. None of this is encouraging, even though we've heard that the recession has ended.[21]
Large businesses with 500 or more employees saw employment declined by 53,000, while medium size companies with 50 to 499 employees and small businesses with fewer that 50 employees saw declines of 75,000 each. [15] Employment in the construction sector reported a drop of 51,000 in October, bringing the total decline to 1,675,000 since January 2007.[15] October was the seventh consecutive month during which the decline in employment was less than in the previous month.[8] The estimated change of employment from August to September was revised by 27,000 from a decline of 254,000 to a decline of 227,000.[19]
Over the last two recessions we've seen "jobless" recoveries where the peak unemployment comes well after the overall turnaround in the U.S. economy. [20] Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms.[2]
SOURCES
1. ADP Employment Shows Private Employers Shed 203K Jobs in October! , Top Story - ecPulse.com
2. TREASURIES-US Treasuries trim losses after ADP report | Markets | Bonds News | Reuters
3. FT.com / US / Economy & Fed - US loses 203,000 jobs in October
4. Investors.com - Job Losses Slowest In Over A Year, ADP Says
5. RT' Business: US services sector expands at slower pace
6. UPDATE 1-US private job loss smallest since July 2008-report | Reuters
7. WRAPUP 2-U.S. services sector grows, job losses decline | Reuters
8. ADP National Employment Report Shows U.S. Employment Decreased by 203,000 Private Sector Jobs in October
9. US ECON: ADP Says October Private Payrolls Down 203,000 - Forbes.com
10. October private-sector job losses slip, but still hit 203,000 -- DailyFinance
11. Private Employers Shed 203K Jobs Last Month | Worcester Business Journal
12. Investors.com - Job Losses Slowest In Over A Year, Service Sector Expands
13. Economic calendar focuses on jobs
14. U.S. job growth seen in early 2010-Macro Advisers | Reuters
15. ADP October Employment Change at -203K | Forex District
16. US private sector sheds 203,000 jobs in October: ADP- International Business-News-The Economic Times
17. Private Sector Employment Shows Slower Pace Of Decline In October
18. US nonfarm employment falls - IBTimes
19. Private Sector Sheds 203,000 Jobs, ADP Reports - WSJ.com
20. Briefing.com: ADP Employment Report Still Weak
21. U.S. loses 203,000 jobs in October - BloggingStocks
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