The ADP private employer services numbers are out, and they’re bleak.
January’s losses have been revised upwards, leading to a much larger than expected February figure too. As Reuters reports (our emphasis):
NEW YORK (Reuters) – U.S. private sector job losses accelerated in February, according to a report by ADP Employer Services that suggests hefty employment declines are on the way in the government’s payrolls report due on Friday.
ADP said on Wednesday that private employers cut 697,000 jobs in February versus a revised 614,000 jobs lost in January. The January job cuts were originally reported at 522,000. It was the biggest job loss since the report’s launch in 2001 and showed the misery of declining employment spreading broadly and evenly throughout the economy.
The service sector, which often resists the grip of recession longer than other areas, accounted for more than half of the total losses, reflecting the rapid deterioration of the economy in recent months. “None really escaped the sword here,” Joel Prakken, chairman of Macroeconomic Advisers, whose firm jointly developed the ADP report, said about the service sector. Economists had expected 610,000 private-sector job cuts in February, according to the median of 23 forecasts in a Reuters poll. The forecasts in the poll ranged widely from a drop of 730,000 to losses of 500,000.
Of particular note is the fact that job losses appear to have been across the board, with large firms losing 121,000 jobs, medium-sized firms losing 314,000 jobs and small firms losing 262,000 jobs.
ADP cited Joel Prakken, chairman of Macroeconomic Advisers explaining how the recession has now spread aggressively to small-sized businesses specifically, despite the fact that earlier in the recession these firms had demonstrated more resiliency than medium and large-sized ones.
Economists as surveyed by Reuters currently expect government employment figures released this Friday to show a loss of 648,000 non-farm payrolls in February.
In other grim US data news, the Institute for Supply Management said its non manufacturing index came in at 41.6 in February versus 42.9 in January, a much faster contraction than the previous month. The ’50′ level separates expansion from contraction in the index, which dates back to July 1997.