Private-sector employment fell by 39,000 from August to September on a seasonally adjusted basis, according to the payroll company ADP’s national employment report released Wednesday. Economists’ consensus forecast was for a 20,000 gain.
“The decline in private employment in September confirms a pause in the economic recovery already evident in other data. A deceleration of employment occurred in all the major sectors shown in the ADP report and for all sizes of payroll,” ADP reported in a news release. “There simply is no momentum in employment.”
After the ADP report’s release, stocks bounced around in a tight range Wednesday. At market close, the Dow Jones industrial average was up 22.93 points, or 0.21%, at 10,967.65, while the Standard & Poor’s 500-stock index dropped 0.78 point, or 0.07%, at 1,159.07, and the Nasdaq was down 19.17 points, or 0.8%, at 2380.66. The 10-year Treasury bond closed at 2.3990%, down 0.75.
In other employment news Wednesday, global outplacement consultancy Challenger, Gray & Christmas said the pace of downsizing remained virtually unchanged in September as employers announced plans to cut 37,151 jobs during the month, a 7% increase from the 34,768 job cuts reported in August.
The September figure was the second lowest of 2010 and followed the lowest monthly job-cut total, 17,241, since June 2000. August’s total was 44% below the 66,404 job cuts reported in September 2009.
Market watchers view the ADP report as a lead-up to the U.S. Labor Department’s headline monthly jobs report, which is scheduled for release this Friday.
In a bit of good news from ADP, the estimated change of employment from July to August was revised up from the previously reported decline of 10,000 to an increase of 10,000.
The September decline in employment followed seven monthly increases from February through August. However, over those seven months, the average monthly gain in employment was 34,000.
“This is disappointing but it does not mean a drop in the official private payroll number is a certainty,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics Ltd., in Valhalla, New York, in an analyst note. “ADP has undershot consistently in recent months and assuming the gap persists we could expect private payrolls to rise about 30,000.”
A proper rise in payrolls cannot happen as long as small businesses, which employ half the workforce, are credit-constrained, Shepherdson added.
Read about last month’s ADP jobs data from the archives of AdvisorOne.com.