298,000 Jobs Shed in August, ADP Saysby
Private non-farm employers cut 298,000 jobs in August, according to estimates by payroll company ADP, a figure that disappointed analysts’ expectations but still showed a gradual easing of job losses.
Businesses with fewer than 50 employees lost 122,000 jobs in August, the smallest decline since September 2008, according to the report. Mid-size businesses (with between 50 and 500 employees) lost 116,000 jobs, and large companies lost 60,000. While that sounds like small businesses bear the brunt of job losses, it’s less severe when you consider that they account for a larger share of employment, says Joel Prakken, chairman of Macroeconomic Advisers, which developed the report.
Monthly job losses will continue to diminish for several months before employment hits bottom around the end of this year, Prakken says. He expects positive employment growth in 2010. The total 298,000 jobs lost was more severe than analysts’ expectations of around 250,000 but not so far off that it’s statistically meaningful, Prakken says.
Small business hiring may lead the recovery since small companies are more concentrated in the service sector, which has a better outlook than the goods producing sector. “Small businesses have their challenges in terms of access to capital and financing conditions, but I do expect them to participate in the recovery once it gets going,” Prakken says.
The Labor Department reports official employment figures for August Friday morning. That report should show fewer net jobs lost because it includes government hiring, Prakken says, but is still likely to come in below analysts’ expectations.