Wednesday, September 1, 2010

ADP Employment Report: Private Payrolls Down 10,000 – First Decline in Seven Months

In August, according to the ADP Employment Report, private sector payrolls fell by 10,000. This followed a downwardly revised increase of 37,000 in July (previously reported to be an increase of 42,000). The decline in August ended a period of six consecutive monthly increase in private payrolls. The labor market is clearly continuing to show weakness. Payrolls need to expand at about 100,000 to 150,000 per month in order to begin to drive down the unemployment rate. Considering that temporary census workers were continuing to be let go in August, it is very likely that the employment number released by the BLS this Friday (which includes public sector payrolls) will also come in as a negative number.

The decline over the month was driven by a drop in goods producing jobs, which fell by 40,000. Manufacturing lost 6,000 jobs; the second decline following four months of expansion. Service sector jobs continued to increase, rising by 30,000. However, this was not enough growth to counteract the decline in goods producing sectors.

10.09.01 (Source: Automatic Data Processing)

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