ADP reports further drop in private employment

07.02.09
By Nicholas Storie

Consumers have long expressed concern over job security - and with good reason. Until the economy makes a significant turn for the better, companies often have no choice but to reduce staffing numbers.

The ADP National Employment report released yesterday shows that private sector employment decreased by 473,000 in June.

Joel Prakken, chairman of Macroeconomic Advisers, the company that partners with ADP to distribute the figures, elaborated on the results.

"In June, construction employment dropped 97,000. This was its twenty-ninth consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,428,000," said Prakken.

"Employment in the financial services sector dropped 29,000, the nineteenth consecutive monthly decline," he added.

For many, job loss has magnified financial problems that had been snowballing for some time. A record number of families are facing foreclosure, credit card debt continues to cripple households, and families' net worth has dropped significantly since the end of last year.

Families that now find themselves with one or both income earners out of a job or working for reduced compensation may also be searching for ways to funnel money into savings for retirement or college tuition.

Meanwhile, many small business owners tap personal savings to keep businesses going or ask friends and families for loans when banks turn them down. These owners and their employees - although some of the most creative and innovative entrepreneurs - have been hard hit during the recession.

Small business employment declined by another 177,000 last month, with monthly losses during April, May and June averaging 185,000.

ADP and Macroeconomic advisors forecast ongoing troubles. The groups say employment among small businesses is set to decline for "at least several more months."

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Employment figures to cause new stress