BLBG: ADP Says U.S. Companies Reduced Payrolls by 491,000 Last Month
Companies in the U.S. cut an estimated 491,000 workers from payrolls in April, indicating the labor market is still weakening amid the worst recession in at least five decades, a private report showed today.
The drop in the ADP Employer Services gauge was smaller than economists forecast. March’s reading was revised to show a reduction of 708,000 workers, down from a previous estimate of 742,000.
“Job losses have been extraordinarily broad,” John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, said before the report. “We continue to expect the unemployment rate to continue to rise throughout 2010.”
Companies are still eliminating staff to bolster profit following the worst slump in consumer spending in three decades. A Labor Department report in two days may show employers cut payrolls in April for a 16th consecutive month, pushing jobs losses in the current downturn to almost 6 million, according to a Bloomberg survey.
The ADP report was forecast to show a decline of 645,000 jobs, according to the median estimate of 28 economists in a Bloomberg News survey. Projections were for decreases ranging from 560,000 to 733,000.
A government report May 8 may show payrolls at companies and government agencies shrank by 610,000 in April and unemployment rose to a 25-year high of 8.9 percent, according to a Bloomberg survey of economists.
Private Employment
The ADP figures comprise only private employment and don’t take into account hiring by government agencies. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP.
Government payrolls may show an improvement in April as the Census Bureau began hiring 140,000 workers to help conduct next year’s population count. A total of 1.4 million people will be hired over the next year, many on a part-time basis, to carry out the survey, Census said in March.
Another report today also reflected a weak labor market. Job cuts announced by U.S. employers rose 47 percent in April from a year earlier to 132,590, led by planned cutbacks at government and non-profit agencies and automotive companies, Chicago-based placement firm Challenger, Gray & Christmas Inc. said.
