ADP Says U.S. Companies Decreased Payrolls by 8,000

By Shobhana Chandra

Oct. 1 (Bloomberg) -- Companies in the U.S. cut an estimated 8,000 jobs in September, less than forecast, a private report based on payroll data showed today.

The drop followed a revised 37,000 decrease in August that was larger than previously estimated, ADP Employer Services said.

Growth in overseas orders is preventing large-scale firings at some firms while automakers and housing-related businesses are paring staff. A government report later this week may show the economy lost jobs in September for the ninth consecutive month, according to the median forecast in a Bloomberg News survey.

``There's no question labor-market conditions are tough, but the usual cyclical payroll meltdown has not yet happened,'' said Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd. in Valhalla, New York. ``It will, though, sooner or later.''

The ADP report was forecast to show a decline of 50,000 jobs, after a drop of 33,000 in August, according to the median estimate of 27 economists in a Bloomberg News survey. Projections ranged from decreases of 20,000 to 135,000.

ADP includes only private employment and does not take into account hiring by government agencies. Macroeconomic Advisers LLC in St. Louis produces the report jointly with ADP.

The government's Oct. 3 report may show total payrolls fell by 105,000 last month, and the unemployment rate was unchanged at a five-year high of 6.1 percent, according to the Bloomberg survey median. The economy has lost 605,000 jobs in the first eight months this year.

First Eight Months

The ADP report estimated private payrolls increased by 29,000 in the first eight months of the year, compared with a 758,000 decline according to Labor Department figures.

ADP said today's estimate didn't include the strike by about 37,000 machinists at Boeing Co. and the job losses following Hurricanes Gustav and Ike.

Today's ADP report showed a decrease of 72,000 workers in goods-producing industries including manufacturers and construction companies.

Service providers added 64,000 workers. Employment in construction dropped by 29,000, reflecting the housing slump, and financial firms increased jobs by 4,000.

Companies employing more than 499 workers shrank their workforces by 6,000 jobs. Medium-sized businesses, with 50 to 499 employees, cut 30,000 jobs and small companies increased payrolls by 28,000.

The ADP report is based on data from 399,000 businesses with about 24 million workers on payrolls.

More Claims

Labor Department figures released so far for September show 466,000 Americans a week on average filed first-time claims for jobless benefits, up from 443,000 in August and 363,000 in the first six months of 2008. Rising unemployment threatens consumer spending, which accounts for more than two-thirds of the economy.

In September, Chrysler LLC said it would fire about 250 employees as part of a plan to eliminate 1,000 salaried positions by month-end, and UAL Corp.'s United Airlines said 1,550 flight attendants volunteered for leaves, eliminating the need for forced layoffs.

ADP began keeping records in January 2001 and started publishing its numbers in 2006. The company says there is a 90 percent correlation between its revised data and the government's monthly private jobs figures.

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net