Job Losses Decline for Seventh Straight Month
Job losses declined in October for the seventh consecutive month, although actual gains in employment are still probably several months off, according to today's National Employment Report from payroll giant ADP.
Nonfarm private employment decreased by 203,000 in October, according to ADP, the smallest decrease since July 2008. September's job losses were also revised to 227,000, a 27,000 improvement over the previous estimate of 554,000.
October's job declines were slightly higher than the 198,000 economists expected, but still point to a stabilizing economy as employers make fewer cuts in staff. Employment levels typically are among the last things to recover following a recession, as employers wait for business conditions to improve before they resume hiring.
"The rate at which jobs are being lost is gradually shrinking," Joel Prakken, chair of Macroeconomic Advisers LLC, which collaborates with ADP to produce the report. "We're heading in the right direction."
Prakken said he did not expect to see employment actually begin to rise again until this winter, with a slow reduction in the jobless rate to follow. He said it might be as long as five years before the nation returns to full employment, generally defined as a 5 percent unemployment rate.
Construction jobs fell by 51,000 in October, marking 33 consecutive months of declines in that sector. Nearly 1.7 million construction jobs have been lost since January 2007. Likewise, financial services employment dropped by 18,000, making 23 straight months of decline in that field. Both sectors have been particular hard-hit by the collapse of the housing and credit markets.
The ADP report tracks only private sector employment and does not reflect government jobs. The report comes out two days before a more comprehensive monthly jobs report from the Labor Department, whose job loss figures have been running about 100,000 per month below those of ADP since last spring.