The drop, the smallest since July 2008, compares with a revised 195,000 decline the prior month, data from ADP Employer Services showed today. The figures were forecast to show a decline of 150,000 jobs, according to the median estimate of 32 economists in a Bloomberg survey.
The report signals the job market is still deteriorating and unemployment will probably climb further even as the economy is emerging from the worst recession since the 1930s. After overestimating payroll losses by 103,000 on average in the five months to September, ADP’s initial estimate for October was in line with the government’s payroll figures.
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 unemployment rate held at a 26- year high of 10.2 percent in November, while employers cut 123,000 jobs, according to the median estimate in a Bloomberg survey.
Another report today showed employers last month announced the fewest number of job cuts since the recession began two years as the economic recovery encouraged companies to retain workers. Planned firings fell 72 percent in November to 50,349 from 181,671 during the same month last year, Chicago-based placement firm Challenger, Gray & Christmas Inc. said.
The economy has lost 7.3 million jobs since the recession began in December 2007, the most of any economic slump since the Great Depression.
Today’s ADP report showed a decrease of 88,000 workers in goods-producing industries including manufacturers and construction companies. Service providers cut 81,000 workers.
Employment in construction fell by 44,000, the 34th straight monthly drop, while financial firms decreased jobs by 17,000, ADP said, the 24th consecutive decline for the industry.
Companies employing more than 499 workers shrank their workforce by 44,000 jobs. Medium-sized businesses, with 50 to 499 employees, eliminated 57,000 jobs and small companies decreased payrolls by 68,000, ADP said.
The ADP report is based on data from 400,000 businesses with about 23 million workers on payrolls. ADP began keeping records in January 2001 and started publishing its numbers in 2006.