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Non-farm private employment decreased a whopping 157,000 in October on a seasonally-adjusted basis, ADP announced Wednesday in the ADP National Employment Report (pdf).
Meanwhile, the September estimated change in employment was revised to a decrease of 26,000 from the previously announced decrease of 8,000 jobs, ADP said.
Manufacturing employment fell 85,000 in October -- its 26th consecutive monthly decline. Meanwhile, the service sector of the economy lost 31,000 jobs, the first monthly job loss in the service sector since November 2002.
Economist Richard Felson said the October ADP private sector report offered little good news for the U.S economy.
"It is a large monthly job loss, and even more distressing was the job loss total in the service sector," Dawson said. "Up until now the service sector was creating jobs, helping to prop up the economy. The fact that services lost jobs in a month for the first time in six years is a bad sign for the economy because it removes one of the few remaining bright spots in the job market. Job market conditions have worsened and we're likely to continue to see 100,000-plus job loss months for awhile, I'm afraid."
Most of the decline in employment during October was accounted for by job losses at medium-sized companies, which registered a 91,000-job decline. Meanwhile, large businesses cut 41,000 jobs in October, and small businesses cut 25,000.
Economic Analysis: A very poor job report, one that indicates worsening job market conditions. However, economists caution that one should not read too much into the monthly ADP job report, due to its limited scope (private sector payrolls). The more telling statistic is the U.S. Labor Department's monthly payroll statistic, and the October data will be released Friday, November 7 at 8:30 a.m. EST. That report is expected to show a 200,000-job decline, according to a Bloomberg News survey of economists.
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