Non-farm private employment declined by 79,000 jobs in June, according to figures released by payroll giant ADP.

The ADP National Employment Report, compiled by Macroeconomic Advisers, showed small businesses with less than 50 employees gained 7,000 jobs in June, but midsized businesses with 50 to 499 employees lost 35,000 jobs. Large businesses with 500 employees or more lost 51,000 jobs in June.

Job cuts occurred across various industry sectors. The goods-producing sector lost 76,000 jobs, and the manufacturing sector dropped 44,000 jobs. Construction employment dropped 34,000, and employment in financial activities fell by 3,000 in June. Even the service-providing sector lost 3,000 jobs, the first decline since November 2002.

"It's a very soft report, but it's not a recession-like report," said Macroeconomic Advisers chairman Joel Prakken. "In recessions, employment can decline by as much as 300,000 to 400,000. The [Bureau of Labor Statistics] estimates and the ADP numbers show we haven't had anything like that yet."

However, Prakken acknowledged that the decline in the service sector was worrisome. "To see this kind of decline suggests that there is occurring some leakage from manufacturing and housing to other sectors of the economy," he said.

ADP also revised downward the figures from its May report, which originally showed an increase of 40,000 private sector jobs (see Private Sector Added 40,000 Jobs in May). The revised figures show an increase of 25,000 jobs in May. Figures from the U.S. Bureau of Labor Statistics, in contrast, showed a decline of 62,000 jobs in May within the private and public sectors, and an additional 62,000 jobs in June.

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