Private jobs shrunk at their slowest monthly pace since July of 2008 in September, according to the ADP employment survey, which tracks payrolls from private industry.
ADP said 254,000 jobs were lost in September, including 103,000 in the services sector and 151,000 in the manufacturing sector. Wall Street was disappointed with the results though, as forecasters were looking for a total decline of 195k jobs.
Economists said the report would have little impact as the ADP survey has been off in recent months, and traders are more concerned with the official statistics coming out Friday.
“Over the last six months, the ADP estimate has undershot the official BLS count by an average of 73k per month,” noted analysts from Nomura. “Adding this amount to the ADP estimate for September produces an adjusted value of about -180k ― very close to consensus forecasts for Friday's Employment Report.”
Ian Pollick, economics strategist at TD Securities, said the broader trend is still comforting.
“Despite the losses being larger than expected by the broader market, this print does represent the sixth consecutive month of improvements in the pace of decline, and corroborates our view that the U.S. labor market has already seen the worst of its problems,” he said.
In other benevolent news, August’s report was revised up by 21,000 to show a decline of 277k jobs.
Looking ahead, it remains unclear when the labor market will turnaround, but virtually all forecasters believe the unemployment rate, currently at 9.7%, will hit double-digits by early 2010.
“Employment, which usually trails overall economic activity, is likely to decline for at least several more months, with losses continuing to diminish,” said Joel Prakken, chairman of Macroeconomic Advisers, within the ADP report.
Small businesses carried the brunt of the losses. Businesses with fewer than 50 workers shed 100,000 jobs, while businesses with more than 500 workers let go 61,000 workers. Jobs in medium sized businesses declined by 93,000.
The construction industry saw 73,000 jobs vanish in the month, marking the 32nd consecutive decline. Since January 2007, 1.632 million construction jobs have disappeared. The financial sector also continues to suffer, with 19,000 jobs gone in September.