Fewer Jobs Lost in October, ADP Report Says

Roseland, NJ, Nov. 5, 2009--According to the ADP employment report, payrolls declined 203,000 in October compared to a decline of 227,000 in September.

The consensus predicted payrolls to decline by 198,000 for the month.

In order for unemployment to decline, payrolls need to increase by a little over 100,000 a month. Given that a 100,000 a month gain is still 300,000 away from October's report, it seems very likely that the unemployment rate has not peaked.

Small businesses, defined as firms with less than 50 workers, saw their lowest level of declines (-75,000 workers) since July 2008. Medium-size businesses also shed 75,000 workers. However, payrolls at firms of this size may come under attack due to lack of available funding. The bankruptcy of CIT wiped away a source of funds for many firms and could force small to medium size firms with volatile cash flows to layoff workers until the flows become more stable.

Construction employment continues to be under siege as payrolls declined 51,000 and brought the total decline in construction jobs to 1.675 million workers. Manufacturing payrolls declined by 65,000 workers.