The drop in the ADP Employer Services gauge was larger than economists forecast and the most since records began in 2001. February’s reading was revised to show cut of 706,000 workers, up from a previous estimate of 697,000.
Companies are slashing staff as tight credit conditions and shrinking household wealth cause sales to shrink. The Labor Department may report in two days that employers cut payrolls in March for a 15th consecutive month, putting jobs losses in the current downturn at more than 5 million, according to a Bloomberg survey.
The ADP figures comprise only private employment and do not take into account hiring by government agencies. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP.
Another report today also reflected a weak labor market. Job cuts announced by U.S. employers nearly tripled in March from a year earlier, led by planned cutbacks at government agencies, pharmaceutical and aerospace and defense firms, Chicago-based placement firm Challenger, Gray & Christmas Inc. said.
Firing announcements rose by 181 percent from March 2008, to 150,411. Compared with the prior month, announcements fell for a second consecutive time, the first two-month decrease in job cuts since February-March 2007.
Today’s ADP report showed a reduction of 327,000 workers in goods-producing industries including manufacturers and construction companies. Employment in manufacturing dropped by 206,000. Service providers cut 415,000 workers.
Companies employing more than 499 workers shrank their workforces by 128,000 jobs. Medium-sized businesses, with 50 to 499 employees, cut 330,000 jobs and small companies decreased payrolls by 284,000.
Industries cutting jobs ranged from automakers and high- tech companies to materials makers and service companies.
The ADP report is based on data from 400,000 businesses with about 24 million workers on payrolls.
ADP began keeping records in January 2001 and started publishing its numbers in 2006.