By Susan A. Baird
PBN Web Editor
ROSELAND, N.J. – U.S. companies shrank their payrolls by 33,000 jobs last month, after adding a downwardly-revised 1,000 jobs in July, according to a report today by ADP Employment Services.
The August decline “continues the recent trend in employment that is consistent with an economy that is growing slowly but has not fallen into recession,” Joel Prakken, chairman of survey company Macroeconomic Advisers LLC, wrote in the report.
Analysts had expected a loss of 30,000 non-farm jobs would follow the originally reported July gain of 9,000 positions (READ MORE), according to the median estimate from a survey of economists by Bloomberg News.
The goods-producing sector lost 78,000 jobs last month, in its 21st consecutive monthly decline, the ADP survey found. And within that sector, manufacturing employment fell by 56,000 jobs in its 24rd consecutive decline.
“These losses were somewhat offset by employment gains in the service-providing sector of the economy, which advanced by 45,000 [last month],” Prakken wrote.
The August survey, however, “suggests little lessening of the recent strain on employment” for the hard-hit residential construction and financial activities sectors. Construction employment fell by 25,000 jobs last month, in its 21st monthly decline, bringing total employment losses since the industry’s August 2006 peak to 377,000. And financial activities employment shrank last month by 2,000 jobs.
Last month’s few job gains were concentrated at small companies, those with 49 or fewer workers, which added 20,000 jobs in August, the survey found. Medium-sized businesses – those with 50 to 499 workers – reduced their work forces by 25,000 jobs. Large businesses – those employing 500 or more workers – pared 28,000 jobs from their payrolls.
Although job growth at small businesses last month “declined from last month’s revised increase of 46,000, these figures continue to offer evidence of the resiliency small-size businesses have demonstrated over the past several years when compared to the job losses experienced at larger firms,” Prakken added.
That trend has spurred the addition of a new monthly ADP Small Business Report that is a subset of the national report. In August, the new survey found, small employers in the service sector added 36,000 jobs, more than offsetting losses in the goods-producing sector, where small employers shed 16,000 jobs.
ADP’s monthly report is prepared by Macroeconomic Advisers, based on ADP payroll data from about 399,000 employers with nearly 24 million workers nationwide. Unlike federal figures, it does not consider employment by government agencies.
A report due tomorrow from the U.S. Department of Commerce is expected to show that the nation lost 75,000 public and private jobs last month, based on the median estimate from a Bloomberg survey of 76 economists. Their predictions call for the national jobless rate to hold steady in August at 5.7 percent.
“The labor market seems to be a slow-bleeding thing,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, told Bloomberg News. “There doesn’t appear to be an avalanche of enormous job losses,” he said, “but it’s enough, and it appears to be continuing and there doesn’t appear to be a let-up.”
ADP Employment Services – a division of Automatic Data Processing Inc. (NYSE: ADP) – handles payroll for 1 in 6 private-sector employees nationwide. For more information, visit www.adp.com.
