Retrenchment had cut 533,000 jobs from US payrolls in November, official data showed. -- PHOTO: REUTERS
WASHINGTON - THE US private sector lost 693,000 jobs in December, a survey showed on Wednesday amid deepening recession in the world's biggest economy.
The December job decline in non farm private employment, revealed in the ADP National Employment Report, was far bigger than 493,000 job cuts expected by analysts in the last month of 2008.
Some 476,000 job losses were reported in November, said the ADP report, pointing particularly to a deterioration in jobs in small and medium-sized firms.
'Sharply falling employment at medium- and small-size businesses clearly indicates that the recession has now spread well beyond manufacturing and housing-related activities,' ADP warned.
Employment in the service-providing sector fell by 473,000 in December and by 220,000 in the goods-producing sector, the 23rd consecutive monthly decline, according to the report.
Some 120,000 jobs were shed in the manufacturing sector, marking its 27th decline over the last 28 months, it said.
The ADP report is 'shockingly awful,' said Ian Shepherdson, chief US economist of High Frequency Economics.
The report came ahead of Friday's official US payrolls report, which some said could be even bleaker.
'If the recent relationship between the ADP numbers (after their recent revisions) and the official payroll data holds, then we should expect a number of about (minus) 700,000 on Friday, the biggest drop in 59 years,' Mr Shepherdson said.
'Even the best case here, though, implies a payroll number of (minus) 568,000,' he said.
Retrenchment had cut 533,000 jobs from US payrolls in November, official data showed.
In another reflection of the contracting labour market, Chicago-based global outplacement consultancy Challenger, Gray & Christmas said Wednesday that employers planned to cut another 166,348 jobs from payrolls in December.
'That is largest December job-cut total on record,' the company, which began tracking layoffs in 1993, said in a year-end job-cut report.
The two bleak employment reports on Wednesday as well as persistent macroeconomic and company-specific worries sparked investors fears, pulling down the benchmark Dow Jones Industrial Average 245.40 points or 2.72 per cent to 8,769.70.
The new unemployment data 'suggest a strong downward risk' to the non farm payroll forecast, said French investment bank Natixis. Analysts expect a 475,000 decline.
The US jobless rate has risen to 6.7 per cent, the highest since October 1993, with nearly three million people having joined the jobless ranks since the recession began a year ago.
The construction and manufacturing sectors are expected to continue posting sharp monthly employment declines as the US economy contracts, Deutsche Bank said in a report.
The centrepiece of a massive economic stimulus plan by President-elect Barack Obama, who takes office on Jan 20, is to create or preserve three million jobs - more than 80 per cent in the private sector. -- AFP
