US employment in the private sector fell by 693,000 in December, according to the ADP employment report released Wednesday. This follows a downwardly-revised November in which payrolls were lower by 476,000, not the initially reported 250,000. For December, the number was below estimations, as economists were looking for job losses in the range of 500,000.
Employment in the services sector fell by 473,000, the third monthly decline in a row. Jobs in the goods-producing sector fell by 220,000, the 23rd consecutive monthly decline. Employment in the manufacturing sector declined 120,000, marking its 27th decline over the last 28 months.
Large businesses, defined as those with 500 or more workers, saw employment decline 91,000, while medium-size businesses with between 50 and 499 workers declined 321,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 281,000. Sharply falling employment at medium- and small-size businesses clearly indicates that the recession has now spread well beyond manufacturing and housing-related activities.
The methodology for the ADP index has been revised with the aim of making it a better fit with the government figures to be released on Friday. Economists currently expect nonfarm payrolls to have fallen by 500,000 in December.
The ADP index covers only private-sector payrolls. Assuming government payrolls expand by 20,000 jobs or so, the ADP index implies an estimated 670,000 decrease in total nonfarm payroll employment in December.
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