Private sector cut 693,000 jobs in December

[LargoWinch]

Ok and again: to put things in perspective, my hometown has 300,000 souls...


Private sector cut 693,000 jobs in December

• Wednesday January 7, 2009, 9:08 am EST

NEW YORK (Reuters) - Private-sector employers shed 693,000 jobs in December, a private employment service said on Wednesday in a report that was far worse than expected and pointed to more ugly news from the government's jobs data due later this week.

A man walks past a store advertising a sale in Virginia, November 28, 2008. REUTERS/Larry Downing



The drop, much bigger than the revised 476,000 private sector jobs lost in November, is consistent with about a 670,000 fall in December non-farm payrolls, said Joel Prakken, chairman of Macroeconomic Advisers LLC, which jointly develops the private sector employment report with ADP Employer Services.

On Friday the government will release its non-farm payrolls report, considered the most authoritative gauge of the U.S. labor market.
After the ADP report, U.S. Treasury bonds regained some lost ground, the dollar extended its losses against the euro and the yen and U.S. stock futures slid.

The median of estimates from 20 economists surveyed by Reuters for the ADP Employer Services report was for a loss of 473,000 private-sector jobs in December.

The report for December was the first month the data was issued using a new methodology, which ADP said was designed to more closely predict the outcome of the government's non-farm payrolls report.

"It's obviously a terrible number, though everyone was expecting a terrible number," said Steven Butler, director of FX trading at Scotia Capital in Toronto.

"The initial shock is a big one...and should keep the dollar under pressure for the rest of the session," he said.

(Reporting by John Parry and Burton Frierson; Editing by Chizu Nomiyama)

Article link:
http://finance.yahoo.com/news/Privat...-13989928.html

[Chomsky]

Re: Private sector cut 693,000 jobs in December

Jobs crash, indeed.

[stockman]

Re: Private sector cut 693,000 jobs in December

Jobs losses broadly should help accelerate the asset deflation cycle.

"To see that deflation is possible for the U.S., we look at
two important relationships. The first is the connection
between credit market tightness and job losses. Nearly
90% of U.S. banks reported tightening their commercial
and industrial lending standards in the fourth quarter of

2008. This is well above the roughly half of banks report

ing tightening during the last two recessions. Just as importantly,
while this series only goes back to the early 1990s,
there has historically been a 6-9 month lag between peaks
in this series and peaks in job losses. If this holds this time
around, even if credit markets improve dramatically very
soon, job losses in the U.S. will still be accelerating into the
second half of next year and could exceed one million per

quarter." http://www.td.com/economics/special/..._deflation.pdf


FWIW- GOING POSTAL-

Chatting with a friend from the city who happens to work for the USPS...

He was clearly worried about the economy and I inquired- 'isn't the USPS one of the safest jobs in the country right now?' Apparently not.

Postal Service Sees Less Mail In Slumping Economy

http://www.npr.org/templates/story/story.php?storyId=99027132&sc=emaf

"The recession is reaching well beyond the automotive industry or the mall. It's even hitting the U.S. Postal Service, the nation's third-largest employer. From holiday cards to credit card offers, mail volume is down. And the Postal Service is losing money."


My friend related how in a 'normal year' about 50 semi loads of 3rd class (junk mail) would be pulling in between Xmas eve and New Years. This year it's 'scary there's hardly anything'.

So I called another old friend who has retired to AZ now- his life's business (and a lucrative one at that) had been coordinating major junk mail campaigns for the corporate world. He still keeps up with some old contacts... seems he retired at a good time. Many of the printers and contractors he dealt with are in trouble or gone. He described it as a secular decline- similar to what has occurred in the newspaper industry. Print and mail is in a steep decline. Suffering this year from a big cyclical decline on top of the secular trend away from print. Among his concerns- the more efficient electronic world could displace a lot of direct and indirect employees of the physical mail business AND the more traffic that is shifted to electronic the more inefficient (and uneconomic) the mail system becomes. The post office will either have to raise rates significantly OR it will be adding to government deficits.



First-Ever Layoffs Loom at Postal Service

"The U.S. Postal Service faces a serious financial shortfall that is accelerating reductions in its workforce and raising the possibility of the first-ever layoffs of career employees.
Reduced mail volume, rising costs, and a newly enacted cap on rate increases all have taken a toll on the Postal Service’s finances. A gradual shift to electronic communications and bill payment is shrinking the number of first-class letters, a mainstay of postal revenues. And the current economic downturn has led to drops in advertising mail volume."
http://www.labornotes.org/node/1947

[Rantly McTirade]

Re: Private sector cut 693,000 jobs in December

Although, so far, the % loss of jobs is less than the 1980 & '82 and
1974 recessions.
Otoh, the official figures don't typically include the loss of jobs filled by dislegal aliens & other 'off the books' types.
Not that I'm troubled by, or sympathetic to, the latter.:mad: