More jobs lost than expected in September, survey says
U.S. employers shed more jobs in September than had been expected, according to a closely watched survey that cast a shadow over the government’s official September jobs report due Friday.
Private nonfarm payroll employment fell by 39,000 jobs last month, according to the ADP National Employment Report released Wednesday. That was somewhat surprising, because the consensus forecast of mainstream economists had called for a gain of about 20,000 jobs.
“I think this is a disappointing result,” said Joel Prakken, chairman of Macroeconomic Advisers, which crunches payroll data to issue the monthly report. “Economic growth slowed pretty much in the middle of the year … and we think the fourth quarter is going to be a quarter of slow economic growth.”
The ADP report doesn’t measure public-sector jobs. The federal Bureau of Labor Statistics does, and its report Friday for September will be the last one before congressional elections Nov. 2. It’s now expected to be quite soft.
That’s because state and local governments face enormous budget pressures and are laying off workers. In addition, temporary hires for the 2010 census are still leaving the government payroll.
Construction jobs dropped by 28,000 in September, the ADP report said. Since its January 2007 peak, the construction sector has shrunk by 2,297,000 jobs.
Other losing sectors in September included manufacturing, down 17,000 jobs, and financial services, down 13,000.
The ADP report would have been even weaker if not for a slight uptick of 6,000 jobs in the services sector.
“There’s also weakness when you slice the data by size of payroll: 14,000 jobs lost in small-business payrolls, 14,000 in medium-sized payrolls and another 11,000 in large. So whether it’s by sector or by size, the numbers are weak,” Prakken said.
There’s little hope for serious hiring gains the rest of this year.
“We are expecting quite modest growth in employment through the end of the year and into next year,” Prakken said. “It won’t surprise me at all if the unemployment rate ticks up from its most recently reported 9.6% to something like 9.8 or 9.9 by the end of the year.”
The International Monetary Fund seconded that glum view, issuing its revised global forecast Wednesday. It cut its U.S. growth forecast for 2010 to 2.6%, down from 3.3% in its July forecast, and said the rate was likely to slow further in 2011, to a 2.3% annual rate.
In another widely tracked report issued Wednesday, job placement firm Challenger, Gray & Christmas Inc. said that September layoffs rose 7%. Its monthly layoff survey reports that employers announced plans to cut 37,151 jobs during the month, more than in August, but the second-lowest total of the year.
Hall writes for MarketWatch.com/McClatchy.
