ADP Estimates U.S. Companies Cut 39,000 Jobs in September
The retail industry topped the list, with plans to take on 114,000 workers, the report showed. Photographer: Chris Rank/Bloomberg
Oct. 6 (Bloomberg) -- Steven Levitt, a professor of economics at the University of Chicago, discusses the impact of stimulus funds on the U.S. economy and outlook for the housing market. Levitt speaks with Betty Liu on Bloomberg Television’s “In the Loop,” from the World Business Forum in New York. He is co-author of the books “Freakonomics" and "SuperFreaknomics." (Source: Bloomberg)
Oct. 6 (Bloomberg) -- Companies in the U.S. unexpectedly cut workers in September, data from a private report based on payrolls showed. Employment decreased by 39,000, according to figures today from ADP Employer Services. Bloomberg's Betty Liu and Michael McKee report. (Source: Bloomberg)
Companies in the U.S. unexpectedly cut jobs in September, data from a private report based on payrolls showed today.
Employment decreased by 39,000, the biggest drop since January, after a revised 10,000 rise in August, according to figures from ADP Employer Services. The median estimate of 37 economists surveyed by Bloomberg News called for a 20,000 gain. Forecasts ranged from a decline of 44,000 to a 75,000 increase.
A loss of jobs raises the risk that consumer spending, the largest part of the economy, will retrench and halt the recovery. A Labor Department report in two days will show companies added 75,000 workers last month, economists project.
“It’s more evidence of a lousy labor market,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “Here we are, 18 months into a recovery and we’re not doing much on the job front. Until we digest the excesses built up over decades, you’re not going to see sustained gains in jobs or the overall economy.”
Stocks fluctuated between gains and losses and Treasury securities rose as the report raised concern over the outlook for employment. The Standard & Poor’s 500 Index rose 0.1 percent to 1,161.85 at 10:04 a.m. in New York. The yield on the benchmark 10-year Treasury note, which moves inversely to prices, dropped to 2.40 percent from 2.47 percent late yesterday.
Prior Misses
Over the previous six reports, ADP’s initial figures were closest to the Labor Department’s first estimate of private payrolls in May, when it overestimated the gain in jobs by 14,000. The estimate was least accurate in April, when it underestimated the employment gain by 199,000.
ADP’s initial August estimate showed a 10,000 drop in private employment compared with the government’s estimate of a 67,000 increase.
“This is a disappointing result,” Joel Prakken, chairman of St. Louis-based Macroeconomic Advisers LLC, which produces the figures with ADP, said of today’s figures on a conference call with reporters. “It’s going to be a while before employment really perks up.”
High unemployment, public debt and fragile banking systems pose risks to global prosperity, according to a report today from the International Monetary Fund, which urged policy makers to take bolder steps to assure a sustained recovery.
The Washington-based fund lowered its forecast for U.S. growth this year and 2011, predicting a “slow” rebound restrained by a lack of consumer spending.
Geithner’s Outlook
Countries that rely on exports to help lift their economies must change policies or “global growth will slow and all of us will be worse off,” U.S. Treasury Secretary Timothy F. Geithner said today in advance of this week’s meeting in Washington of the IMF, World Bank and Group of 20 nations.
Global exchange-rates are a source of contention heading into the meetings.
“It is very important to see more progress by the major emerging economies to more flexible, more market-oriented exchange-rate systems,” Geithner said at the Brookings Institution in Washington. “This is particularly important for those countries whose currencies are significantly undervalued.”
Geithner said the “greatest risk to the world economy today is that the largest economies underachieve on growth.”
Voter Discontent
The economy is a top issue for voters in the November congressional elections and polls show the public is increasingly skeptical of President Barack Obama’s performance. His job approval over a three-day period that ended Oct. 4 was 45 percent, compared with 53 percent at the same time last year, according to a poll from Princeton, New Jersey-based Gallup Inc.
Economists at Goldman Sachs Group Inc. said the U.S. economy will be “fairly bad” or “very bad” over the next six to nine months.
“We see two main scenarios,” analysts led by Jan Hatzius, the New York-based chief U.S. economist at the company, wrote in an e-mail to clients dated yesterday. “A fairly bad one in which the economy grows at a 1 1/2 percent to 2 percent rate through the middle of next year and the unemployment rate rises moderately to 10 percent, and a very bad one in which the economy returns to an outright recession.”
Hatzius placed the odds of a renewed recession at 25 percent to 30 percent, up from 15 percent to 20 percent at the start of the year.
The Labor Department’s report on Oct. 8 will also show the jobless rate increased to 9.7 percent from 9.6 percent, according to the survey median.
Payroll Forecast
Overall payrolls were probably unchanged in September, reflecting the winding down of cutting federal census workers who participated in the decennial population count, according to the Bloomberg survey median.
Today’s ADP report showed payrolls decreased among all companies, small, median and large, which are those employing more 499 workers.
Bristol-Myers Squibb Co., the New York-based drugmaker, said last month that it will cut 3 percent of its global workforce, about 840 jobs, during the next six months. The company previously announced plans to slash more than $2.5 billion in expenses by 2012, and eliminated 7,000 jobs last year.
The ADP report is based on data from about 340,000 businesses with more than 21 million workers on payrolls.
No comments:
Post a Comment