The entrance to the Manhattan branch of the New York State Department of Labor is seen on March 4, 2009. -- PHOTO: REUTERS
NEW YORK - US private sector job cuts fell in June to their lowest in eight months, but they still came in more than expected and the economy may be on track to lose another one million workers by year-end.
WAITING FOR GROWTH
Though many analysts expect the US economy to resume growth in the second half of the year following the worst recession in decades, they note that employment gains usually lag the initial rebound in gross domestic product.
Joel Prakken, chairman of Macroeconomic Advisers, whose firm jointly developed the ADP Employer Services report, told a teleconference of journalists growth is likely to be modest at about 2 to 2.5 per cent in the second half of the year.
Private employers cut 473,000 jobs in June, down from 485,000 in May, according to a report by ADP Employer Services published on Wednesday. Economists surveyed by Reuters had expected 393,000 private-sector job cuts in June.
Though June's loss was the smallest ADP had reported since October 2008, the surprisingly large number of cuts dealt a setback to those expecting the US economy to recover soon.
'The data surprises me a little bit in that the consensus out there seems to be that business is improving and that the economy has hit bottom,' said Mark Bonhard, investment advisor at Dawson Wealth Management in Cleveland, Ohio.
'This definitely is not good news.'
The May figure was revised from an originally reported loss of 532,000 jobs. -- REUTERS
