US job losses forecasted at 532000

06-03-2009 14:08

US job losses for May are forecasted at 532.000, while the labor market points to a minor improvement as the recession weakens, according to a private report. The ADP Employer Services indicator declined more than economists estimated. The reading for April was corrected to a decrease of 545.000 employees, while the prior reading was forecasted at 491.000.

US companies continue to cut jobs

Despite the US economy pointing to a stabilization, US companies such as American Express, General Motors and General Motors, continue to cut workers from payrolls in order to reduce costs. Increasing unemployment will discourage consumer spending, reducing any improvement.

ADP report: decline of 525.000 jobs

The ADP report of today proved a decrease of 267.000 employees in industries that produce goods, incl. construction and manufacturing companies. The service sector showed a drop of 265.000 employees, while the manufacturing sector lost 149.000 jobs.
Large companies, with more than 499 employees, reduced their staff by 100.000 workers, while medium-sized companies, employing 50 to 499 workers, shrank workforces by 223.000. Small-sized companies cut jobs by 209.000.
Data provided by 500.000 businesses formed the basis for the ADP report. ADP revealed the first figures in 2006 while they started reporting in January 2001.

Bloomberg survey: unemployment at 25-year high

The Bloomberg News survey showed that the ADP report is expected to result in a decrease of 525.000 jobs. Estimations for the declines varied between 425.000 and 580.000.
A Bloomberg survey of economists showed that the government report, that will be released June the 5th, could reveal that unemployment climbed to the highest level in 25 years and that companies and government agencies cut jobs by 520.000 in May.

Joel Prakken: weak report

According to the chairman of Macroeconomic Advisers, Joel Prakken, it is a poor report and the improvement versus the level of several months ago could be questioned. He also stated that the improvement, if it remains stable and even increases, will be coherent with a notion that the recession probably reaches its end.