Private sector employment showed another notable decline in the month of April, according to a report released by Automatic Data Processing, Inc. (ADP) on Wednesday, although the decrease in jobs was much smaller than economists had expected.
The report showed that non-farm private employment fell by 491,000 jobs in April following a revised decrease of 708,000 jobs in March. Economists had expected a decrease of 645,000 jobs compared to the loss of 742,000 jobs originally reported for the previous month.
The smaller than expected decrease in private sector jobs marked the smallest monthly decrease since a loss of 352,000 jobs in October 2008.
Peter Boockvar, equity strategist at Miller Tabak, noted that the ADP report could reflect the static level of firing suggested by the recent plateau in initial jobless claims
However, he noted, Continuing claims moving higher reflects the difficulty in finding new jobs and will result in the unemployment rate moving still higher.
Either way, we'll take less bad, as it's the new good, Boockvar added.
The ADP report showed that employment in the service-providing sector fell by 229,000 jobs in April, while employment in the goods-producing sector declined by 262,000 jobs.
The decrease in employment in the goods-producing sector reflected the thirty-eighth consecutive monthly decline in manufacturing jobs, which fell by 159,000.
While large businesses lost 77,000 jobs, medium-size businesses and small-size businesses lost 231,000 jobs and 183,000 jobs, respectively.
ADP said that the decreases in employment at medium and small-size businesses indicate that the recession continues to spread beyond manufacturing and housing-related activities to almost every area of the economy.
While the ADP report points to continued weakness in the labor market, it presents another sign that the economy is stabilizing and is likely to generate some optimism about the Labor Department's monthly employment report due to be released on Friday.
Economists currently expect the Labor Department report, which includes government jobs, to show that employment fell by 620,000 jobs in April following a decrease of 663,000 jobs in March. The unemployment rate is expected to rise to a twenty-five year high of 8.9 percent.
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