We will take a look at the US government jobs report in a separate post. First lets take a look at the ADP National Employment Report for October.
This month’s employment loss was driven by the goods-producing sector which declined 126,000 during October, its twenty-third consecutive monthly decline. The manufacturing sector marked its twenty-sixth consecutive monthly decline, losing 85,000 jobs. These losses were compounded by an employment decline in the service-providing sector of the economy which fell by 31,000, the first loss in the service-providing sector recorded by the ADP Report since November of 2002.
Large businesses, defined as those with 500 or more workers, saw employment decline 41,000, while medium-size companies with between 50 and 499 workers declined 91,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 25,000.
This is the first outright decline in small business employment reported by the ADP Report since November of 2002, and the largest percentage decline since the economy was emerging from recession in early 2002.
In October, construction employment dropped 45,000. This was its twenty-third consecutive monthly decline, and brings the total decline in construction jobs since the peak in August of 2006 to 455,000.
click on chart for sharper image
I circled in red the two key items in that chart. Small business and the service sector jobs are both contracting for the first time since 2002 . It’s an ominous sign but one everyone should have known was coming.
Here is another interesting chart from the report.
Chart 5. Monthly Changes of Employment in Construction
click on chart for sharper image.
Remarkably, the BLS has added construction jobs to its Birth/Death Model for 8 consecutive months (February through September). We will see if the absurdity continues for for a ninth later today.
Mike “Mish” Shedlock
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