UPDATE: ADP Survey Finds Dec US Private-Sector Jobs Down 84K

UPDATE: ADP Survey Finds Dec US Private-Sector Jobs Down 84K

(Updates with comments from Macroeconomic Advisers)

    By Kathleen Madigan    Of DOW JONES NEWSWIRES  

NEW YORK -(Dow Jones)- Private-sector jobs in the U.S. fell by 84,000 in December, the smallest drop since March 2008, and service providers added jobs, according to a national employment report published Wednesday by payroll company Automatic Data Processing Inc. (ADP) and consultancy Macroeconomic Advisers.

The ADP loss is slightly below the 90,000 drop projected by economists in a Dow Jones Newswires survey. The estimated change of employment from October to November was revised by 24,000, from a decline of 169,000 to a decline of 145,000.

"We're clearly moving now in the right direction," said Joel Prakken, chairman of Macroeconomic Advisers, which compiles the survey for ADP. He expects payrolls to turn positive in the first quarter and gain strength in second half.

The ADP survey tallies only private-sector jobs, while the Bureau of Labor Statistics' nonfarm payroll data, to be released Friday, include government workers.

Economists surveyed by Dow Jones expect the BLS will report December payrolls fell by only 10,000, following the 11,000 jobs lost in November. The expected December loss would be the best showing for the labor markets since December 2007, when jobs grew 120,000.

The December unemployment rate is projected to edge up to 10.1% from 10.0%. Friday's report will include benchmark revisions to the household survey which includes the unemployment rate. Macroeconomic Advisers projects the jobless rate will peak above 10% in the first quarter and fall only slowly, remaining above 9% by end-2010.

The latest ADP report showed large businesses with 500 employees or more shed 34,000 jobs and medium-size businesses lost 25,000 workers in December. Small businesses that employ fewer than 50 workers cut 25,000 jobs.

Service-sector jobs added jobs, by 12,000, the first increase since March 2008, while factory jobs dropped 43,000.

Prakken pointed out that the losses in both factory and construction jobs in December were worse than in November, highlighting the unevenness in hiring.

"You want to see cyclical components in employment rising to feel very secure about the durability of the recovery," he said.

Prakken also said nonfarm payrolls in the first half will be skewed by government hiring of workers for the 2010 U.S. Census.

ADP, of Roseland, N.J., said it processes payments of one in six U.S. workers, while Macroeconomic Advisers, based in St. Louis, is an economic-consulting firm.

In another Wednesday job report, outplacement firm Challenger, Gray & Christmas said that the number of layoffs announced by U.S. companies in December totaled 45,094, down 10% from November. It was the lowest reading since December 2007, the starting date of the recession.

-By Kathleen Madigan, Dow Jones Newswires; 212-416-2466; kathleen.madigan@dowjones.com

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(END) Dow Jones Newswires

January 06, 2010 09:34 ET (14:34 GMT)

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