ADP Says U.S. Companies Cut Estimated 84,000 Jobs

Companies in the U.S. cut an estimated 84,000 jobs in December, according to a private report based on payroll data., Bloomberg 1/6/2010 9:21:50 AM

The drop, the smallest since March 2008, was larger than forecast and compares with a revised 145,000 decline the prior month, data from ADP Employer Services showed today. ADP figures overstated the Labor Department’s estimate of private payroll losses by 85,000 per month on average in the six months to November after today’s revisions.

Figures from the Labor Department show firings have slowed as the world’s largest economy began to recover from the worst recession since the 1930s. Economists surveyed by Bloomberg News anticipate the government’s report Jan. 8 will indicate job losses came to an end last month after two years of declines that eliminated 7.2 million workers from payrolls.

ADP includes only private employment and doesn’t take into account hiring by government agencies. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP.

Another report today showed employers last month announced the fewest job cuts since the recession began in December 2007 as the economic recovery encouraged companies to retain staff. Planned firings fell 73 percent in December to 45,094 from 166,348 during the same month the prior year, Chicago-based placement firm Challenger, Gray & Christmas Inc. said.

The Labor Department’s report in two days is also forecast to show the unemployment rate climbed to 10.1 percent in December from 10 percent the prior month, according to the survey median.

The number of jobs lost since the recession began in December 2007 is the biggest in the post-World War II era.

Today’s ADP report showed a decrease of 96,000 workers in goods-producing industries including manufacturers and construction companies. Service providers added 12,000 workers.

Employment in construction fell by 52,000, the 35th straight monthly drop, while financial firms decreased jobs by 12,000, ADP said, the 25th consecutive decline for the industry.

Companies employing more than 499 workers shrank their workforce by 34,000 jobs. Medium-sized businesses, with 50 to 499 employees, eliminated 25,000 jobs and small companies decreased payrolls by 25,000, ADP said.

The ADP report is based on data from about 360,000 businesses with about 22 million workers on payrolls. ADP began keeping records in January 2001 and started publishing its numbers in 2006.

ADP Says U.S. Companies Cut Estimated 84,000 Jobs