U.S. private-sector employment dropped by 203,000 in October

According to the ADP National Employment Report, released on November 4, private sector employment decreased by 203,000 in October. The ADP National Employment Report, created by Automatic Data Processing Inc. in partnership with Macroeconomic Advisers LLC, is derived from actual payroll data and measures the change in total non-farm private employment each month.

Non-farm Private Employment Highlights – October Report:

•         Total employment: -203,000

•         Small businesses* -75,000

•         Medium businesses** -75,000

•         Large businesses*** -53,000

•         Goods-producing sector: -117,000

•         Service-providing sector: -86,000

Addendum:

• Manufacturing industry: -65,000

* Small businesses represent payrolls with 1-49 employees

** Medium businesses represent payrolls with 50-499 employees

*** Large businesses represent payrolls with more than 499 employees

According to Joel Prakken, chairman of Macroeconomic Advisers, “Non-farm private employment decreased 203,000 from September to October 2009 on a seasonally adjusted basis, according to the ADP National Employment Report. October was the seventh consecutive month during which the decline in employment was less than in the previous month. Nevertheless, despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least a few more months.”

Prakken added, “October’s ADP Report estimates non-farm private employment in the service-providing sector fell by 86,000. Employment in the goods-producing sector declined 117,000, with employment in the manufacturing sector dropping 65,000. Large businesses, defined as those with 500 or more workers, saw employment decline by 53,000, while medium-size businesses with between 50 and 499 workers declined 75,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 75,000.”

Prakken went on to say, “In October, construction employment dropped 51,000. This was its 33rd consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,675,000. Employment in the financial services sector dropped 18,000, the 23rd consecutive monthly decline.”

Small Business Highlights – October Report

Due to the important contribution small businesses make to economic growth, employment data that is specific to businesses with fewer than 50 employees will be reported in the ADP Small Business Report each month. The ADP Small Business Report is a subset of the ADP National Employment Report.

•         Total small business employment: -75,000

•         Goods-producing sector: -41,000 small business jobs

•         Service-providing sector: -34,000 small business jobs

Private employment among small businesses decreased by 75,000 in October, according to the ADP Small Business Report. Additional information about small business employment, including charts on monthly job growth and employment levels, along with historical data, is available at http://www.smallbusinessreport.adp.com.

“Employment among small-size businesses, defined as those with fewer than 50 workers, declined 75,000 in October. 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.

About ADP

Automatic Data Processing Inc., with nearly $9 billion in revenues and about 570,000 clients, is one of the world's largest providers of business outsourcing solutions. Leveraging 60 years of experience, ADP offers the widest range of HR, payroll, tax and benefits administration solutions from a single source.