ADP Report Shows That While Jobs Losses Continue, They are Slowing (Update)
More News related to Economic Data
- PCE Core for October: 0.2%, vs. Consensus of 0.1%; Up 1.4% YoY
- October Personal Income: 0.2%, vs. Consensus of 0.1%; Personal Spending: 0.7%, vs. 0.5%
- October Durable Goods: Down 0.6%, vs. Consensus of Up 0.5%
- Initial Jobless Claims: 466K, vs. Consensus of 500K; Continuing Claims: 5.423M
- FOMC Minutes from Nov. 3-4 Meeting
(Update with comments from analysts)
While the nation continues to lose jobs, the rate at which the employment market is decreasing is gradually shrinking, according to the Automatic Data Processing (ADP) National Employment Report for October.
ADP reported that private-sector employers cut 203,000 jobs for the month of October. Economists had estimated a loss of 198,000 jobs last month.
October was the seventh month in a row that the number of jobs cut fell from the month before.
According to Joel Prakken, the chairman of Macroeconomic Advisors, there are signs of improvement in the job market. However, Prakken adds that employers are expected to continue to reduce payrolls for the next few months.
”October's employment decline was the smallest since July of 2008. Employment usually trails overall economic activity, so losses are likely to continue for at least a few more months, but at a diminishing rate," said Prakken.
Prakken added that he expects the jobless rate, which currently sits at 9.8 percent, is expected to peak at above 10 percent sometime next year. He added that the country is not likely to return to full employment, which is defined as a 5 percent jobless rate or better, until 2014.
Today's ADP report is a glimpse into the employment picture ahead of Friday's much more important non-farm payrolls number, which has economists looking for job losses of 175,000.
Analyst Comments:
John Stoltzfus, analyst with Ticonderoga Securities sees a strong trend with the seven months of consecutive decline in loss of jobs. However, he was quick to point out that the government will have to continue to aid the jobless recovery.
"The job market remains in conflict, it is something that needs to be addressed, not only by employers, but likely the government will consider some type of tax incentive for employers to hire people..as was done in the late 1970s," Stoltzfus told StreetInisider.com. "This gives support to the thought that the Fed will stay on hold longer as it let's the nascent economy gather strength and show an ability to sustain growth before it raises rates."
Another point that Stoltzfus made was the construction sector showed a loss in jobs for the 33rd-straight month.
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