Tags: Report Private Sector Cuts 10 | 000 Jobs in August

Private Sector Unexpectedly Cuts 10,000 Jobs

Wednesday, 01 Sep 2010 08:59 AM

Private employers unexpectedly cut jobs in August, a report by a payrolls processor showed on Wednesday, delivering another blow to the already faltering economic recovery.

The private sector cut 10,000 jobs in August compared to a revised gain of 37,000 in July, ADP Employer Services said. The July figure was originally reported as a gain of 42,000.

The ADP figures come ahead of the government's much more comprehensive labor market report on Friday, which includes both public and private sector employment and is expected to show job losses driven by the public sector.

"Clearly, last month was a bad month. We already know that. And we know that some of the numbers are clearly going to be bad," said Ned Riley, chief executive officer at Riley Asset Management in Boston.

"I'm still very concerned about Friday's report, because of the impact of census workers, but the ADP report doesn't change my thinking about what to expect. Friday's number was already supposed to be significantly on the downside."

Stock index futures trimmed their gains after the ADP report and government bonds initially erased some of their losses before selling off further. The dollar extended its losses versus the yen.

The median of estimates from 34 economists surveyed by Reuters for the ADP report, which was jointly developed with Macroeconomic Advisers LLC, was for a rise of 19,000 private-sector jobs in August.

The ADP release followed a separate report on Wednesday showing the number of planned layoffs at firms fell 17 percent in August from the prior month and hit the lowest level in 10 years.

Employers announced 34,768 planned job cuts last month, down from 41,676 in July, outplacement consultancy Challenger, Gray & Christmas, Inc. said.

It was the first month-on-month decline since April, when planned job losses had hit a seven-year low, and the lowest level since June 2000.

Friday's nonfarm payrolls report is expected to show a fall overall of 100,000 in August, based on a Reuters poll of analysts, but a rise in private payrolls of 41,000.

Economists often refer to the ADP report to fine-tune their expectations for the payrolls numbers, though it is not always accurate in predicting the outcome.

In other data, mortgage applications for home purchasing and refinancing increased last week as interest rates hit a new low, a glimmer of hope for a housing market that has failed to find footing in the absence of government support.

Demand for home loan refinancing rose for a fifth straight week, a development that may provide a much-needed jolt to a flailing economy as it could portend an increase in consumer spending.

© 2017 Thomson/Reuters. All rights reserved.

   
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Private employers unexpectedly cut jobs in August, a report by a payrolls processor showed on Wednesday, delivering another blow to the already faltering economic recovery. The private sector cut 10,000 jobs in August compared to a revised gain of 37,000 in July, ADP...
Report Private Sector Cuts 10,000 Jobs in August
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2010-59-01
Wednesday, 01 Sep 2010 08:59 AM
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