ROSELAND, N.J. – Payrolls at U.S. companies shrank by 157,000 jobs last month, after losing an upwardly-revised 26,000 jobs in September, ADP Employment Services said today in its monthly report.
“This month’s employment loss was driven by the goods-producing sector, which declined 126,000 during October [in] its 23rd consecutive monthly decline,” wrote Joel Prakken, chairman of St. Louis-based survey company Macroeconomic Advisers LLC. “These losses were compounded by an employment decline in the service-providing sector of the economy, which fell by 31,000,” he said, as service employment shrank for the first time since November 2002.
Analysts had expected a loss of 102,000 non-farm jobs would follow the 8,000-job loss originally reported for September (READ MORE), based on the median estimate of 28 economists polled by Bloomberg News. (Their October estimates called for nationwide losses of 70,000 to 245,000 to private non-farm jobs.)
Within the goods-producing sector, manufacturing payrolls lost 85,000 jobs, in their 26th consecutive monthly decline. The ADP report “does not reflect the strike of some 27,000 machinists in the aerospace industry during September and October,” Prakken added.
Construction payrolls shrank by 45,000 positions in their 23rd consecutive decline, bringing the sector’s losses since August 2006 to 455,000 jobs.
Payrolls in the financial services employment also shrank last month, losing 2,000 jobs.
Job losses nationwide once again were concentrated at medium-sized businesses – those with 50 to 499 workers – which reduced their work forces by 91,000 jobs in October, the survey found. Large businesses – those employing 500 or more – slashed 41,000 jobs from their payrolls.
Meanwhile, small companies – those with 49 or fewer workers – pared payrolls last month by 25,000 jobs. “This is the first outright decline in small business employment reported by the ADP Report since November of 2002, and the largest percentage decline since the economy was emerging from recession in early 2002,” Prakken noted.
During the first nine months of the year, U.S. private payrolls grew at an average rate of 2,300 jobs per month, ADP figures show. By contrast, U.S. Labor Department data including employment by government agencies shows that non-farm payrolls nationwide lost an average of 108,000 positions per month over the same period.
A federal report due Nov. 7 is expected to show that total payrolls contracted by 200,000 last month – extending losses of 760,000 jobs in the first nine months of 2008 – while the jobless rate hit a five-year high of 6.3 percent, the Bloomberg survey found.
“We are starting to see more recession-like declines in employment,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, told Bloomberg News. “The loss of jobs means consumers will continue to retrench in the next couple of quarters.”
ADP Employment Services – a division of Automatic Data Processing Inc. (NYSE: ADP) – handles payroll for 1 in 6 private-sector employees nationwide. The monthly ADP National Employment Report is prepared by Macroeconomic Advisers LLC, based on ADP payroll data from about 399,000 employers with nearly 24 million workers nationwide. For more information, visit www.adp.com.
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