ROSELAND, N.J. – U.S. companies added jobs last month at the slowest pace in four months, based on preliminary data released today by ADP Employer Services.
Nonfarm private employment increased by a seasonally adjusted 40,000 jobs from November to December, after rising a revised 173,000 jobs the month before, for a two-month gain of 213,000 jobs. By contrast, the survey’s average gain from September to November was 118,000 jobs per month.
Analysts had expected today’s report to show employers adding 33,000 jobs in December on top of the 189,000-job gain initially reported for November, for a two-month increase of 222,000 jobs, based on the median forecast from a survey of 16 economists by Bloomberg News.
The monthly report, produced by ADP and Macroeconomic Advisers LLC of St. Louis, is based on a survey of nearly 400,000 ADP customers nationwide that represent nearly 23 million U.S. employees.
The gains again were concentrated in small and mid-sized businesses, which added 75,000 jobs in December, less than half November’s 159,000 gain. Businesses with 49 or fewer workers added 66,000 jobs last month, while mid-sized businesses with 50 to 499 workers added 9,000 jobs. Employment at large employers, with 500 or more workers, shrank by 35,000 jobs last month, erasing the previous month’s gains.
The gains were largest at small businesses in the service-providing sector, which added 64,000 jobs last month while their goods-producing counterparts added only 2,000. Mid-sized businesses in the service sector added 38,000 jobs, a gain largely offset by the loss of 29,000 jobs at mid-sized goods-producing businesses. Employment at large service businesses shrank by 31,000 over the month, while employment at large goods-producing businesses shrank by 4,000 jobs.
Total private non-farm employment in the service-providing sector grew by 71,000 last month.
Those gains were partly offset by losses in the goods-producing sector, in which employment shrank by 31,000 jobs in its 13th consecutive month-over-month decline. Within goods-producing industries, manufacturing employment shrank by 16,000 jobs, in its 18th consecutive decline.
“Two sectors of the economy hit hardest by recent problems in mortgage markets have been residential construction and financial activities related to home sales and mortgage lending,” the ADP analysts noted in their report.
“Today’s data suggest that in these two crucial sectors, employment is still falling. In December, construction employment fell 17,000. This is the 13th consecutive monthly decline, bringing the total decline in construction jobs since the peak in August 2006 to 199,000. Employment in financial activities fell 5,000, which is the third decline during the last five months.”
Meanwhile, “employment in the temporary staffing industry reached a new high in early December after experiencing a decline during the week of the Thanksgiving holiday,” the American Staffing Association said in a separate report. The ASA Staffing Index surged to a record high of 111 in the week ended Dec. 7 before falling back to 109 points in the week ended Dec. 16, the association said.
After two weeks at the previous high of 110 points in late October, the index had held at 109 points in early November, then dipped to 104 points in the seven days ended Nov. 25 as the Thanksgiving holiday shortened the work week, the ASA said.
“The slowdown in hiring is intensifying,” Kevin Logan, senior market economist at Dresdner Kleinwort in New York, told Bloomberg News. “Growth has slowed, and it makes the economy more vulnerable to a potential recession.”
ADP Employment Services – a division of Automatic Data Processing Inc.(NYSE: ADP) – handles payroll for 1 in 6 private-sector employees nationwide. For more information, including the monthly ADP National Employment Report, visit www.adp.com.
The American Staffing Association is a trade group whose members represent more than 85 percent of U.S. staffing industry sales. Its monthly ASA Staffing Index, launched in the summer of 2006, is based on data gathered by research firm iLoyalty. To learn more, visit americanstaffing.net.
