ADP Says U.S. Companies Cut 254,000 Jobs This Month

Companies in the U.S. cut 254,000 jobs this month, more than forecast, a private report based on payroll data showed today.

The estimated drop, which was the smallest since July 2008, compares with a revised 277,000 decline the prior month, figures from ADP Employer Services showed.

Companies may keep firing workers until they see sustained gains in demand. While economists predict a return to growth this quarter, the Federal Reserve said last week that sluggish income growth and tight credit are curbing household spending and slowing the pace of the recovery.

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.

The report comes two days before a Labor Department release forecast to show the U.S. unemployment rate rose to 9.8 percent in September, the highest since 1983, while employers cut 180,000 jobs.

The economy has lost 6.9 million jobs since the recession began in December 2007, the most of any economic slump since the Great Depression.

Today’s report showed a decrease of 151,000 workers in goods-producing industries including manufacturers and construction companies. Service providers cut 103,000 workers.

Employment in construction fell by 73,000, the 32nd straight monthly drop, while financial firms decreased jobs by 19,000, ADP said, the 22nd consecutive decline for the industry.

Companies employing more than 499 workers shrank their workforce by 61,000 jobs. Medium-sized businesses, with 50 to 499 employees, eliminated 93,000 jobs, and small companies cut 100,000, ADP said.

Announcements of staff reductions continued last week.

ADP Says U.S. Companies Cut 254,000 Jobs This Month, Bloomberg
9/30/2009 9:40:01 AM