Nonfarm private employment decreased an enormous 250,000 in November (pdf) on a seasonally adjusted basis, ADP announced Wednesday.Meanwhile, the October estimated change in employment was revised to a decrease of 179,000 jobs from the previously-announced decrease of 157,000 jobs.
While manufacturing employment fell 118,000 in November -- its 27th consecutive monthly decline -- the service sector of the economy lost 92,000 jobs -- its second consecutive monthly job loss, and the first back-to-back monthly job loss in that sector since November 2002.
Economist Richard Felson said the November ADP private sector report shows a U.S. economy with few strengths. "It is another distressing report. The fact that the service sector is now registering large job losses is bearish for the economy. Previously, the service sector had been the only sign of strength," Felson said. "Simply, the nation, and the other regions of the world need to create engines of growth to reverse this negative spiral of decreased demand, lower revenue, job losses, decreased demand."
Most of the decline in employment during November was accounted for by job losses at medium-sized companies, which registered a 130,000-job decline. Meanwhile, large businesses cut 41,000 jobs in November. Small businesses cut 79,000 jobs during the month.
The hard-hit construction sector continued to shed jobs, with employment falling 44,000 -- the sector's 24th consecutive monthly decline. The November tally brought total construction jobs lost since the August 2006 peak to 521,000.
Economic Analysis: Another very poor job report -- one that indicates worsening job market conditions. There were no positives in the ADP report, and the size of the private sector losses -- 250,000 jobs -- indicates that the economy is now shedding jobs at an enormous rate -- one capable of leading to large declines in corporate revenue and earnings, which is not good news for the stock market.
Still, the more-telling statistic is the U.S. Labor Department's monthly payroll statistic, and the November data will be released Friday, December 5 at 8:30 a.m. EST. That report is expected to show a 300,000-job decline, according to a Bloomberg News survey of economists.
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Reader Comments (Page 1 of 1)
12-03-2008 @ 10:20AM
Ray said...
So far it looks like the market had this number baked in. It is amazing the news the market will trade on and yet almost ignore really critical news.
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