ADP Says U.S. Companies Cut 20,000 Jobs in February

U.S. companies in February cut the fewest jobs in two years, according to data from a private report based on payrolls., Bloomberg 3/3/2010 11:16:51 AM

The 20,000 decline was in line with forecasts and followed a revised 60,000 drop the prior month, data from ADP Employer Services showed today. Over the previous six months, ADP’s initial figures have overstated the Labor Department’s first estimate of private payroll losses by as little as 10,000 in January to as much as 151,000 in November.

Companies are hesitant to add workers until they see sustained gains in sales as the U.S. emerges from the worst recession since the 1930s.

Most economists agree the severe winter storms in February will probably depress the Labor Department’s payroll figures.

ADP includes only private employment and doesn’t take into account hiring by government agencies.

Employers last month announced the fewest job cuts in more than three years, according to a report today by the job placement firm Challenger, Gray & Christmas Inc. Planned firings fell 77 percent in February to 42,090, the least since July 2006, from 186,350 a year earlier, the Chicago-based company said. Announcements decreased from 71,482 in January.

The economy has lost 8.4 million jobs since the recession began in December 2007, the most of any downturn in the post- World War II era. In January, U.S. payrolls unexpectedly shrank by 20,000.

Today’s ADP report showed a decrease of 37,000 workers in goods-producing industries including manufacturers and construction companies. Service providers added 17,000 workers.

Employment in construction fell by 41,000, while factories added 3,000 jobs, the first gain since January 2008, ADP said.

Companies employing more than 499 workers shrank their workforces by 10,000 jobs. Medium-sized businesses, with 50 to 499 employees, added 8,000 jobs and small companies decreased payrolls by 18,000, ADP said.

The ADP report is based on data from about 360,000 businesses with more than 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 20,000 Jobs in February