More jobs cut in August than expected

WASHINGTON – Despite the appearance of positive economic news in recent weeks, it appears that businesses are not yet convinced that recovery is here.
According to a report by ADP Employer Services, private employers cut their payrolls by 298,000 in August, 19.2 percent greater than the 250,000 forecast by a panel of 32 economists conducted by Bloomberg News. The August drop comes on the heels of a downwardly revised 360,000 drop in private payrolls for July, according to ADP.
The larger than expected decline in August, however, reignited fears that consumer spending would be sluggish in returning to levels that will pull the economy out of recession.
“Considering the severity of the recession and uncertainty over the strength and sustainability of the recovery, the labor market’s recuperation will be slow and painful,” Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pa., told Bloomberg.
While the news was not good, the job cuts were 21 percent less than in July and 14 percent fewer than in August 2008.
At the same time that employers were trimming staff, they were getting more productivity out of the remaining work force, according to U.S. Labor Department statistics.
Worker productivity in the second quarter of the year increased at a 6.6 percent annual rate, the most it has done so since the third quarter of 2003, as labor costs fell the most in nine years.