ADP: 84,000 Jobs Whacked In December, Worse Than Expected

[Soul Crusher]

ADP: 84,000 Jobs Whacked In December, Worse Than Expected
Vince Veneziani | Jan. 6, 2010, 8:41 AM | 410 | 
PrintTags: Employment, Jobs, Recession
www.businessinsider.com
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The private employment sector lost 84,000 jobs for December.

The Street was expecting a number around 75k, so while it's not good news, the spread is at least tight.

Below, the release in full:

ADP:  According to today's ADP National Employment Report®, private sector employment decreased by 84,000 in December. The ADP National Employment Report, created by Automatic Data Processing, Inc. (ADP®), in partnership with Macroeconomic Advisers, LLC, is derived from actual payroll data and measures the change in total nonfarm private employment each month.

Nonfarm Private Employment Highlights -- December Report:
 -- Total employment:             -84,000
 -- Small businesses*             -25,000
 -- Medium businesses**           -25,000
 -- Large businesses***           -34,000
 -- Goods-producing sector:       -96,000
 -- Service-providing sector:     +12,000
Addendum:
 -- Manufacturing industry:       -43,000
* 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, LLC, "Nonfarm private employment decreased 84,000 from November to December 2009 on a seasonally adjusted basis, according to the ADP National Employment Report. The December employment decline was the smallest since March of 2008. Employment losses are now rapidly diminishing and, if recent trends continue, private employment will begin rising within the next few months."

Prakken added, "December's ADP Report estimates nonfarm private employment in the service-providing sector increased by 12,000, the largest increase since January of 2008. However, this employment growth was not enough to offset continued losses in the goods-producing sector. Employment in the goods-producing sector declined 96,000, with employment in the manufacturing sector dropping 43,000."

"Large businesses, defined as those with 500 or more workers, saw employment decline by 34,000, while medium-size businesses with between 50 and 499 workers declined 25,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 25,000," said Prakken.

Prakken went on to say, "In December, construction employment dropped 52,000. This was its thirty-fifth consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,777,000. Employment in the financial services sector dropped 12,000."

The matched sample used to develop the ADP National Employment Report was derived from ADP data, which during the twelve month period through December 2009, averaged over 360,000 U.S. business clients and represented over 22 million U.S. employees. This approximately represents the size of the matched sample used this month.

Small Business Highlights -- December 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: -25,000
--  Goods-producing sector: -36,000 small business jobs
--  Service-providing sector: +11,000 small business jobs
   

Private employment among small businesses decreased by 25,000 in December, according to the ADP Small Business Report released today. 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 25,000 in December. However, small business employment within the service-providing sector increased by 11,000 during December. If recent trends continue, private employment will begin rising within the next few months," said Joel Prakken.

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I read a state that about 100,000 new people enter the workforce each month due to age factors and that we need to create at least 125,000 jobs a month just to break even. 

Thus, the real rate of UE is likely to keep going up with numbers like this. 

[Kazan]

Why is it always worse than expected? Who are the assclown that are "monitoring" this?

[Soul Crusher]

Why is it always worse than expected? Who are the assclown that are "monitoring" this?

Its the knee-padders in the media who think Hope & Change is an actual policy and just repeating the lie will make it happen. 

I fully expect this and in fact expect things to fall off the cliff in the coming year with what this morinic govt is doing. 

[pedro01]

Its the knee-padders in the media who think Hope & Change is an actual policy and just repeating the lie will make it happen. 

That is very far off the mark. The media does not come up with the estimates. You should refrain from just making things up if you want to remain credible.

I fully expect this and in fact expect things to fall off the cliff in the coming year with what this morinic govt is doing. 

Also note that December numbers got revised from -169K to -145K. Note that this number has been declining for 9 straight months.

What does this tell us though ? On it's own - not very much... Fact is, you can't read much into a single months numbers. Certainly not as much as you can from the overall trend. Far from being doom and gloom - this report is a mixed bag.

ADP Employment Report Weaker than Expected

The ADP report, a precursor to Friday's official Employment Situation Report, estimated that 84,000 nonfarm private jobs were lost in December 2009. The consensus had expected the ADP report to show a drop of only 75,000 jobs.

While the ADP report was weaker than the consensus had expected, it represented the ninth consecutive monthly fall in the rate of payroll declines. Further, the change in payrolls is now at its lowest level since March 2008.

In an even better sign of a strengthening labor market, the ADP report estimated that private employment in the service sector posted its first monthly payroll gain since March 2008. While the payroll change isn't huge, only 12,000, if this estimate comes to fruition on Friday's employment report, the market should see a strong psychological boost as it anticipates an unemployment peak in the very near future.

However, the makeup of the increase in service sector employment could be a driver in how the market perceives the labor market. Over the last couple of months, temporary employment has been a main driver in keeping the service sector afloat. An increase in temporary workers will drive down the unemployment rate but will not have much effect on increasing aggregate incomes. As a result, even though the employment rate may fall, aggregate consumption will not post much of a reaction.

Unfortunately, even with the increase in service-related employment, goods production remains weak. The goods-producing sector lost 96,000 jobs in December as manufacturing employment shed 43,000 jobs. The drop in manufacturing employment was expected, but recent reports from Fed and ISM-related surveys have suggested employment growth may be on the horizon.

In other details:

Medium and small business payrolls each fell 25,000 in December while large business payrolls declined by 34,000.

Construction employment fell for the 35th consecutive month as businesses shed 52,000 jobs.

Financial service sector employment fell by 12,000 jobs.

[BM OUT]

Thats funny,EVERY economist says this is a very bad sign for Fridays upcoming jobs numbers,you dont think its bad though.1 trillion dollar stimulous package and ZERO jobs to show for it.Sad.

[Soul Crusher]

Oh I know.  However ADP is a credible report.  

I have no idea where these estimates come from.  

Like I said earlier, I read that we need to create 150,000 jobs a month just to break even.

    

[pedro01]

Thats funny,EVERY economist says this is a very bad sign for Fridays upcoming jobs numbers,you dont think its bad though.1 trillion dollar stimulous package and ZERO jobs to show for it.Sad.

Actually, a single number is not bad or good. Of course, if it were -1 million, that would be bad. The numbers are declining and I do agree that the stimulus has failed to do anything in terms of increasing the number of jobs available.

As for what economists think, you do realise that economists were put on this planet to make weather forecasters look good, right ?

Every time a number like this is announced, CNN, CNBC, FOX, MSNBC et al wheel out an economic expert to make a noise about what is effectively nothing but NOISE.

Just watch - at the end of today, if the market closes up or down, there will be an 'expert' on to explain why. Strange how such experts aren't on at the start of the day saying where the market would go. It's just pure entertainmnt and should not be takend seriously.

I maintain that this report is mixed. I think it's neutral. It points neither to things getting better or to things getting worse.

[BM OUT]

Actually, a single number is not bad or good. Of course, if it were -1 million, that would be bad. The numbers are declining and I do agree that the stimulus has failed to do anything in terms of increasing the number of jobs available.

As for what economists think, you do realise that economists were put on this planet to make weather forecasters look good, right ?

Every time a number like this is announced, CNN, CNBC, FOX, MSNBC et al wheel out an economic expert to make a noise about what is effectively nothing but NOISE.

Just watch - at the end of today, if the market closes up or down, there will be an 'expert' on to explain why. Strange how such experts aren't on at the start of the day saying where the market would go. It's just pure entertainmnt and should not be takend seriously.

I maintain that this report is mixed. I think it's neutral. It points neither to things getting better or to things getting worse.

I agree ,they arent getting better or worse.Thats bad.When you have a stimulous that used 700 billion,and calls for more,thats a very verey bad thing.Its a slush fund for democrats.Imagine if they had cut payroll taxes by a billion dollars instead.

[pedro01]

I agree with that completely. This economy does not look very stimulated !