RTTNews - Private sector employment experienced another notable decline in the month of May, according to a report released by Automatic Data Processing, Inc. (ADP) on Wednesday, with the decrease in jobs slightly exceeding economist estimates.
The report said non-farm private employment fell by 532,000 jobs in May following a revised decrease of 545,000 jobs in April. Economists had expected a decrease of about 525,000 jobs compared to the decline of 491,000 jobs originally reported for the previous month.
Peter Boockvar, equity strategist at Miller Tabak, The level of initial jobless claims of about 625,000 that we've seen does fit with this level of job losses, which has stabilized, albeit at still very weak levels.
Employment losses in April and May averaged 539,000, which ADP said is a notable improvement from the 691,000 average monthly losses seen in the first three months of the year.
However, ADP added, Despite some recent indications that economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least several more months, although perhaps not as rapidly as during the last six months.
The report showed that the drop in employment in May reflected weakness in both the service-providing sector and the goods-producing sector.
While the service-providing sector lost 265,000 jobs, the goods-producing sector lost 267,000 jobs. Within the goods-producing sector, employment in the manufacturing sector fell by 149,000 jobs, marking the thirty-ninth consecutive monthly decline.
The job losses were led by medium and small-size businesses, which lost 223,000 jobs and 209,000 jobs, respectively. Large businesses saw employment decline by 100,000 jobs.
ADP noted that small-size businesses have shed 2.125 million jobs since reaching peak employment in January 2008.
Boockvar said, While we've no doubt seen stabilization in the level of firings at still weak levels, hiring still remains sluggish, and until the economy starts generating 125,000-plus jobs monthly, the unemployment rate will continue higher.
Friday morning, the Labor Department is scheduled to release its closely watched monthly employment report, which includes government jobs.
Economists expect the Labor Department report to show that employment fell by 550,000 jobs in May, pushing the unemployment rate up to a twenty-five year high of 9.2 percent.
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