U.S. Companies Cut 250,000 Jobs in November

Companies in the U.S. eliminated an estimated 250,000 jobs in November, the most since November 2001, a private report based on payroll data showed today.

The drop was larger than forecast and followed a revised 179,000 decrease in October that was more than previously estimated, ADP Employer Services said.

Companies from Citigroup Inc. to General Motors Corp. have stepped up the pace of firings with the world’s largest economy in its first recession since 2001. A government report in two days may show the economy lost jobs in November for an 11th consecutive month, according to a Bloomberg News survey of economists.

The ADP report was forecast to show a decline of 205,000 jobs, after an originally reported drop of 157,000 in October, according to the median estimate of 22 economists in a Bloomberg News survey. Projections of job losses ranged from 169,000 to 350,000.

ADP includes only private employment and does not take into account hiring by government agencies, which is included in the monthly payroll report. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP.

The government may report on Dec. 5 that total payrolls fell by 325,000 last month, and the unemployment rate rose to a 15-year high of 6.8 percent, according to the Bloomberg survey median. The economy has lost 1.2 million jobs in the first 10 months of the year.

Other labor-market reports have also shown weakness. Job cuts in November soared to 181,671, the largest monthly layoff toll since January 2002, according to a report from outplacement firm Challenger, Gray & Christmas Inc. earlier today. That number, led by 91,356 cuts in the financial services industry, was 148 percent higher than a year ago.

As economic data have pointed to a deteriorating economy, the business-cycle dating committee of the National Bureau of Economic Research announced on Dec. 1 that the economy entered a recession in December 2007, making it the first downturn since 2001.

Today’s ADP report showed a decrease of 158,000 jobs in goods-producing industries including manufacturers and construction companies. Service providers cut 92,000 workers. Employment in construction fell by 44,000, the 24th consecutive month of job cuts in the industry.

Companies employing more than 499 workers shrank their workforce by 41,000 jobs. Medium-sized businesses, with 50 to 499 employees, down 130,000 jobs and small companies decreased payrolls by 79,000.

ADP this year has consistently underestimated job losses among private employers. Private payrolls dropped by an average 134,000 a month from January through October, according to the Labor Department. The revised ADP estimate shows average private employment losses of 17,600 in the first 10 months of the year.

The ADP report is based on data from 399,000 businesses with about 24 million workers on payrolls. ADP began keeping records in January 2001 and started publishing its numbers in 2006.

U.S. Companies Cut 250,000 Jobs in November

TradingEconomics.com, Bloomberg.com
12/3/2008 5:49:22 AM