ADP Says U.S. Companies Reduced Payrolls by 491,000

Companies in the U.S. cut an estimated 491,000 workers from payrolls in April, indicating the worst of the recession’s job losses may have passed, a private report showed today., Bloomberg 5/6/2009 9:15:48 AM

The drop in the ADP Employer Services gauge was smaller than economists forecast and the fewest since October. March’s reading was revised to show a reduction of 708,000 workers, down from a previous estimate of 742,000.

Stabilization in consumer sending following the worst slump in three decades is stoking expectations that the recession will end in the second half of the year. Still, a Labor Department report in two days may show employers cut payrolls in April for a 16th consecutive month, pushing jobs losses in the current downturn to almost 6 million, according to a Bloomberg survey.

A government report May 8 may show payrolls at companies and government agencies shrank by 610,000 in April and unemployment rose to a 25-year high of 8.9 percent, according to a Bloomberg survey of economists.

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

Government payrolls may show an improvement in April as the Census Bureau began hiring 140,000 workers to help conduct next year’s population count. A total of 1.4 million people will be hired over the next year, many on a part-time basis, to carry out the survey, Census said in March.

Another report today also reflected a weak labor market. Job cuts announced by U.S. employers rose 47 percent in April from a year earlier to 132,590, led by planned cutbacks at government and non-profit agencies and automotive companies, Chicago-based placement firm Challenger, Gray & Christmas Inc. said.

Today’s ADP report showed a reduction of 262,000 workers in goods-producing industries including manufacturers and construction companies. Employment in manufacturing dropped by 159,000. Service providers cut 229,000 workers.

Companies employing more than 499 workers shrank their workforces by 77,000 jobs. Medium-sized businesses, with 50 to 499 employees, cut 231,000 jobs and small companies decreased payrolls by 183,000.

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.

ADP Says U.S. Companies Reduced Payrolls by 491,000