UPDATE: Sept Sees 91K More Private-Sector Jobs, But More Layoffs
October 05 2011 - 9:50AM
Dow Jones News
Private businesses added slightly more than expected jobs in
September, according to a report released Wednesday. But large
companies cut jobs and thanks mostly to two enterprises cutting
staff, layoff announcements last month jumped to the highest number
in more than two years.
Private-sector jobs in the U.S. rose by 91,000 last month,
according to a national employment report published by payroll
processor Automatic Data Processing Inc. (ADP) and consultancy
Macroeconomic Advisers.
Economists surveyed by Dow Jones Newswires had expected ADP
would report a September gain of just 75,000. The August data were
revised down to show a rise of 89,000 versus 91,000 reported a
month ago.
"Payrolls are treading water," said Joel Prakken, chairman of
Macroeconomic Advisers who compile the ADP jobs numbers.
The financial markets looked at the ADP report as a positive for
the U.S. economy. The next important read on the U.S. economy will
be the Institute for Supply Management's nonmanufacturing report,
due out later Wednesday.
The ADP survey tallies only private-sector jobs, while the
Bureau of Labor Statistics' nonfarm payroll data, to be released
Friday, include government workers.
Forecasters are unlikely to change their projections for
Friday's payroll number. For August payrolls, ADP reported a very
healthy gain, but the Labor Department said payrolls were
unchanged.
Economists surveyed by Dow Jones Newswires expect total nonfarm
payrolls rose by only 60,000 slots in September. State and local
government layoffs probably cut the top-line payroll number, while
the return of about 46,000 workers on strike at Verizon in
mid-August will lift the job tally.
Prakken said Friday's private payrolls number could come in
higher than the ADP estimate because the ADP survey was not
affected by the swing in Verizon workers.
The September unemployment rate is expected to remain at 9.1%.
The jobless rate has been 9.0% or more since April, a sign of how
labor markets are running out of steam.
The latest ADP report showed large businesses with 500 employees
or more cut 5,000 employees from their staffs, while medium-size
businesses added 36,000 workers in September and small businesses
that employ fewer than 50 workers hired 60,000 new workers.
Service-sector jobs increased by 90,000 last month, and factory
jobs fell by 5,000.
ADP, of Roseland, N.J., says it processes payments of one in six
U.S. workers, while Macroeconomic Advisers, based in St. Louis, is
an economic-consulting firm.
In another job-related report, U.S. employers announced plans to
trim 115,730 workers from the payrolls last month, a 126% jump from
August, according to Challenger Gray & Christmas.
Last month's total is the highest since April 2009, when 132,590
job cuts were announced. But the report said "it is important to
keep in mind that 80,000 cuts, or nearly 70% of last month's total,
came from just two organizations: Bank of America and the United
States Army."
A report by TrimTabs Investment Research showed the U.S. economy
added 64,000 jobs in September, the same estimate Trimtab gave for
August payrolls.
"The good news is that employment was positive in September,"
says Madeline Schnapp, Director of Macroeconomic Research at
TrimTabs. "The bad news is unemployment is likely to increase
because the economy is not producing the 125,000 new jobs needed
monthly to offset population growth."
-By Kathleen Madigan, Dow Jones Newswires; 212-416-2466;
kathleen.madigan@dowjones.com
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