US posts smallest private jobs decline in 11 months
WASHINGTON: The US private sector shed the smallest number of jobs in nearly a year, erasing 298,000 jobs in August as the country emerged from a
severe recession, payrolls firm ADP said on Wednesday.
The August figure for nonfarm private employment on a seasonally adjusted basis was much higher than the 250,000 expected by most analysts.
ADP said while the world's largest economy continued to lose jobs as it struggled out of prolonged contraction, "employment losses are clearly diminishing.
"Despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is still likely to decline for at least several more months, albeit at a diminishing rate," the ADP national employment report said.
It pointed out that August's employment decline was "the smallest since September of 2008."
ADP also revised lower the estimated change of employment from June to July by 11,000, from a decline of 371,000 to a decline of 360,000.
Analysts also cautioned about continuing job losses.
"It is evident from the latest ADP survey that the labor market is taking small steps toward recovery, but conditions remain extremely difficult," said Ryan Sweet, a senior economist with Moody's Economy.com.
"Considering the severity of the recession and uncertainty over the strength and sustainability of the recovery, the labor market's recuperation will be gradual and painful," he said.
Employment in the service-providing sector fell by 146,000 in August while that in the goods-producing sector declined 152,000 and in the manufacturing sector by 74,000, its smallest monthly decline since July of 2008, ADP said.
Large businesses, defined as those with 500 or more workers, saw employment decline by 60,000, while medium-size businesses with between 50 and 499 workers declined 116,000.
Employment among small-size businesses, defined as those with fewer than 50 workers, fell 122,000.
Also Wednesday, the government said US nonfarm productivity accelerated to a stronger than expected revised 6.6 percent annualized rate in the second quarter, the biggest increase in nearly three years.
The increase in the April-June period was the largest since the 2003 third quarter. Most analysts had expected an increase of 6.4 percent.
The ADP figure came ahead of Friday's government August nonfarm payrolls report, seen as one of the best indicators of economic momentum.
A consensus among analysts showed the report should show a smaller loss of 225,000 jobs compared with a 247,000 decline in July and an unemployment rate ticking up to 9.5 percent from a 26-year high of 9.4 percent.
"We reckon Friday's official number will be about 250,000," said Ian Shepherdson, chief US economist with High Frequency Economics.
"That's still terrible, but it does mean that the trend towards smaller net job losses continues. The move to payroll stability, still less net gains, is some way off yet, though," he said.
President Barack Obama has warned that the jobless rate could soar to about 10 percent by year-end, even with an improving economy.
The US economy contracted 1.0 percent in the second quarter, after declining 6.4 percent in the first quarter and 5.4 percent in the final quarter of 2008.
