By John Zappe
It’s jobs report week in the U.S. and so far the news is not encouraging. For the first time in eight months the economy lost private sector jobs, according to payroll processor ADP. The company’s monthly National Employment Report said 39,000 jobs were lost in September.
The report sent the stock market down and surprised economists who had been expecting another month of continued hiring in the range of about 20,000 jobs. The report did revise the August number to a gain of 10,000 from the initial report of a 10,000 job loss.
While the ADP report doesn’t include any government payroll tabulations, it is a harbinger of the Labor Department’s monthly employment report. Due out Friday morning, it is anticipated by the economists surveyed by Dow Jones Newswires to show an overall job loss of 10,000 mainly because of the continuing layoff of temporary Census workers. Private sectors jobs were expected to show a gain of 75,000.
In light of the ADP report, those estimates may be revised.
The especially troubling part of the ADP report is that the job losses were spread across employers of all sizes. Large employers (500+ workers) lost 11,000 jobs, while small (<50) and mid size employers (50-499) lost 14,000 jobs each.
Most of the losses were in the goods producing sector. Service sector employers added 6,000 jobs, all from small employers.
Adding to the misery, Challenger, Gray & Christmas said that in September employers announced plans to cut 37,151 jobs. It’s a seven percent increase from August’s announced layoffs, but in actual numbers it amounts to about 2,400 more cuts.
For the third quarter of 2010, announced layoffs totaled 113,595 jobs, less than half the announced job losses for the same period last year.
Last week, meanwhile, The Conference Board said its monthly count of job postings was just under 4.3 million, an increase of 59,900 over the number of advertised openings in August and almost a million more than September 2009.
Advertised openings don’t necessarily translate into job growth — many factors can account for increased listings, including the fact that more companies are using their online career sites. Today will be a better tell, when the Bureau of Labor Statistics releases its Job Openings and Labor Turnover Survey for August. The JOLTS report offers a sharper picture on worker mobility and hiring. The expectation is that the August report will be very much like the others since the beginning of the year — essentially flat.
The Census Bureau also chimed in with a report showing Americans last year were working fewer hours. The American Community Survey data said on average Americans worked 36 minutes less in 2009 than they did the year before. The effect of that reduction was felt in the median household income, which declined 2.9 percent to $50,221. Poverty also increased. The Census Bureau said 14.3 percent of Americans had an income below the poverty level, compared to 13,2 percent in 2008.
What all the various data points say is that the U.S. economy is in a holding pattern; neither gaining, nor losing jobs. Workers, though, have lost ground since the start of the recession in late 2007 and, while conditions have stabilized, there’s no sign of improvement in the near future. That attitude is reflected in The Conference Board’s Consumer Confidence Index. In September, it fell by 4.7 points, the biggest drop since June.
