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Private sector cuts another 522,000 jobs in January: ADP

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Non-farm private employment decreased 522,000 in January -- roughly in-line with expectations -- ADP announced Wednesday in the ADP National Employment Report.

Meanwhile, the December change in employment was revised to a decrease of 659,000 jobs from the previously-announced decrease of 693,000 jobs, ADP said.

Manufacturing employment fell 243,000 in January -- its 28th consecutive monthly decline. The service sector of the economy lost 279,000 jobs during the month.

Economist Richard Felson said the January ADP private sector report "shows no change in the job trend, which is large job losses throughout the U.S. economy."

"We're well beyond the stage of job cuts stemming from reduced demand following the end of the housing bubble. Job cuts are now occurring simply because companies' clients are decreasing orders . . . the dreaded negative spiral that occurs in a pronounced recession," Felson said. "We'll need a large amount of fiscal stimulus to generate demand and get the economy out of this negative cycle."

Economic Analysis:
As expected, another poor jobs report, but investors should keep in mind the ADP surveys private sector conditions only. The more-telling statistic is the U.S. Labor Department's monthly payroll statistic, and the January data that will be released Friday, February 6 at 8:30 a.m. EST. That report is expected to show a 524,000-job decline, according to a Bloomberg News survey of economists.

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Last updated: November 27, 2009: 05:22 AM

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