Private non-agricultural employment in the United States fell by much more than consensus with a decline of 693k jobs in December, according to a report released from Automatic Data Processing on Wednesday morning. The previous month's data were unrevised down to 476k jobs lost from -472k.
Joel Prakken, spokesperson for the report, told CNBC that the economy is struggling at a pace not seen since 1981 or perhaps even since the Second World War.
The consensus was expecting a decline of 493k; forecasts prior to the release ranged from -250k to -550k.
This is the first month ADP has been using a new methodology which is intended to provide a more accurate picture of the labour market.
Prior to the release, Sal Guatieri, senior economist at BMO Capital Markets, explained the new construction: "The new methodology uses the raw ADP figures, plus data on jobless claims and previous payrolls, to model current payrolls, resulting in a much smaller error compared with the previous method which relied solely on the ADP figures."
Employment in the goods-producing sector declined 220,000 in the month, the 23rd consecutive monthly decline. Employment in the manufacturing sector declined 120,000, marking its 27th decline over the last 28 months.
Large businesses - firms with 500+ workers - saw employment decline 91,000 in December, while employment among small-size businesses - those with fewer than 50 workers - declined 281,000. Medium-size businesses saw 321,000 jobs vanish in the month.
"Sharply falling employment at medium- and small-size businesses clearly indicates that the recession has now spread well beyond manufacturing and housing-related activities," the report said.
Construction employment lost 102,000 jobs in the month, its 21st straight decline.
By Patrick McGee and edited by Nancy Girgis
©CEP News Ltd. 2009