742,000 jobs were lost in the US private sector in March, according to payrolls firm ADP. The figure was worse than expected and comes two days before the publication of official government figures.
AFP - A new survey Wednesday showed a surprise surge in job losses in the US private sector in March, suggesting the recession in the world's largest economy may push unemployment past 25-year highs.
Payrolls firm ADP said Wednesday the private sector shed 742,000 jobs in March, much higher than a consensus analysts' forecast of 663,000 job losses.
"The sharp employment declines among medium- and small-size businesses indicate that the recession continues to spread aggressively beyond manufacturing and housing-related activities to almost every area of the economy," ADP said in a report.
The ADP National Employment Report said it had also revised the job losses figure in February, to 706,000 from 697,000.
The US unemployment rate had jumped to a 25-year high of 8.1 percent in February after the economy hemorrhaged 651,000 jobs that month, according to latest government data.
The official figure for March will be announced on Friday and the ADP report has led analysts to further scale down their forecasts. Before the report, they expected a decline of 658,000 positions.
"Friday's report on March employment will be horrible," said Ryan Sweet, a senior economist with Moody's Economy.com.
Some analysts expect the unemployment rate to grow to double digit soon even as recent economic and financial data showed the recession may be easing.
The ADP data "is very disappointing but not a huge surprise," said Ian Shepherdson, chief US economist of High Frequency Economics.
"We wondered if the inflection in some of the recent data -- retail sales, industrial production, durable goods, home sales -- might be enough to slow the rate of job loss for a time, but it has not," he said.
Companies, he added, would need to see stronger evidence of a sustained slowing in the rate of contraction in demand before the drop in payrolls would slow.
In March, the job losses were spread across all sectors and all size of employers, but the rate of deterioration is faster for smaller companies and the services sector.
The ADP March report said employment among small-size businesses, defined as those with fewer than 50 workers, shrank 284,000 while employment in the service-providing sector fell by 415,000.
In a separate report, global outplacement firm Challenger, Gray & Christmas said while planned job cuts announced by US-based employers fell in March to their lowest in six months, job losses in the first quarter of 2009 were the highest in more than seven years.
"The good news is that job cuts appear to be stabilizing in the financial sector. Unfortunately, other sectors are seeing an increase in cuts as the recession works its way through the economy," said the firm's chief executive, John Challenger.
"State and local governments across the country are struggling with falling tax revenues as more and more people lose their jobs and homes."
Date created : 2009-04-01