The US private sector lost an average of more than 11,000 jobs per week through the end of October, according to data released Tuesday by the private payroll processing company ADP. Economists projected a historic decline in the labor market in recent weeks.
Key data
Private sector employers lost an average of 11,250 jobs per week in the four weeks ending Oct. 25, suggesting the labor market struggled to consistently generate work during the second half of the month, ADP reported. The company noted that the data is preliminary and could change as new information is incorporated.
This drop is the first recorded by ADP since August, when an average of nearly 20,000 jobs were lost in the four weeks ending August 30, according to ADP data.
At the beginning of the month, the job market looked promising. ADP reported last week that private sector payrolls rose by 42,000 jobs in October, beating Wall Street estimates of 37,500 jobs, according to FactSet, a rebound from the loss of 29,000 jobs in September.
However, the latest data from ADP suggests that private sector payrolls declined sharply in late October: The firm reported last month that private employers added an average of 14,250 jobs per week in the four weeks ending October 11.
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Goldman Sachs, Indeed, and more project a bleak job market
Goldman Sachs analysts wrote on Monday that the US nonfarm payrolls number — a gauge of public and private employment — likely fell by 50,000 in October, which would represent the biggest monthly drop since late 2020. Economists surveyed by Dow Jones expected an even bigger drop in October, with estimates of 60,000 jobs lost and the unemployment rate projected to rise to 4.5%.
Indeed, which monitors employment opportunities on its portal, reported that job postings fell to their lowest level since February 2021.
The most recent data available from the Bureau of Labor Statistics (BLS), which delayed releasing its employment and inflation reports during the government shutdown, showed the economy added 22,000 nonfarm jobs in August, while unemployment rose to 4.3%.
Surprising data
More than a million jobs have been eliminated so far this year, 65% more than the more than 664,000 announced during the same period last year, according to career counseling services firm Challenger, Gray & Christmas.
The public sector continues to suffer the most cuts, with more than 300,000 jobs lost, followed by the technology, storage, retail and services sectors. According to Challenger, Gray & Christmas, job cuts have exceeded one million in a year only four times in the past 32 years, including 2001, when the dot-com bubble burst; 2008 and 2009, during the Great Recession; and in 2020, with the start of the Covid-19 pandemic.
Key context
ADP, whose monthly private hiring data is widely followed, announced that it will also publish weekly employment data to offer an even clearer view of the labor market at this critical time for the economy.
The firm’s jobs report remains one of the few available measures of the U.S. labor market during the government shutdown, as several companies, including Amazon, Starbucks, Target and UPS, announced mass layoffs in recent weeks.
Americans expressed growing concern about job prospects, indicates the University of Michigan consumer confidence survey, which last week reported that 71% of respondents expected an increase in unemployment over the next year, the highest percentage since 1980.
This article was originally published in Forbes US
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