The US private sector shed 157,000 jobs in October, accelerating a decline of 26,000 jobs in September, according to a monthly survey by a private payroll data firm released Wednesday.
The October figure was much larger than analysts’ consensus forecast of a drop of 100,000 for the ADP National Employment Report.
Automatic Data Processing noted that its survey had not taken into account a strike by 27,000 machinists at aerospace giant Boeing that began September 6 and ended Sunday.
ADP also sharply revised the September nonfarm jobs loss to 26,000 from a prior estimate of 8,000.
The October report “offers evidence of a labor market that continues to weaken,” ADP said.
The goods-producing sector drove the payrolls loss, shedding 126,000 jobs in its 23rd consecutive monthly decline, while the manufacturing sector marked its 26th straight monthly decline, losing 85,000 jobs.
The huge services sector lost 31,000 jobs, the first decline in the ADP report since November 2002, when the economy was emerging from recession.
Small businesses employing fewer than 50 workers were hard hit, losing 25,000 jobs in the first decline since November 2002, the ADP said.
Grim Report on Jobs, Service Sector
NEW YORK (Reuters) – The private sector jobs market deteriorated rapidly in October while the service sector contracted sharply as the worst financial crisis in 80 years hammered the world’s largest economy.
Privately released reports on Wednesday highlighted the economic challenges facing Barack Obama a day after he won the race for the White House and foreshadowed weakness in the government’s U.S. labor market report due out on Friday.
U.S. private employers made their deepest job cuts in six years last month and companies’ planned layoffs surged to their highest in nearly five years. A key gauge of the service sector fell to the lowest since the index was launched in 1997.
“In short, horrible, but only to be expected in the wake of the equity plunge and the subsequent collapse in confidence,” said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York.
On Wall Street, stocks pared losses as the data did not show a collapse in the services data that some had feared, but the dollar trimmed its gains against the euro. Prices of U.S. government bonds, which usually benefit from signs of economic weakness, pared gains.
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Creating New Jobs Will Be Very Tough
NEW YORK (CNNMoney.com) — Here’s the challenge facing President-elect Barack Obama as he weighs how to create more jobs: another half-million jobs likely will be lost between now and Inauguration Day.
That’s not even counting the 200,000 jobs that economists believe employers trimmed last month, according to estimates from Briefing.com. The October jobs report will be released this Friday.
The unemployment rate is expected to climb to 6.3% from 6.1% and match the worst reading of the decade. And economists all seem to agree the worst is yet to come.
At some point next year the unemployment rate is forecast to pass 7%, a level not seen since 1993.
And monthly job losses of 200,000 or more are expected to become the norm, not the exception, as the full impact of the credit crisis is felt more keenly on Main Street.
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