Payroll Firm ADP Reports U.S. Jobs Still Declining

By Jessica Davis

Job declines are narrowing for the U.S. economy, but things still haven’t turned around enough so that we are adding jobs.

The private sector of the economy shed another net 23,000 jobs between February and March, according to the most recent ADP National Employment Report from payroll processing and HR outsourcing firm ADP.

The service-providing sector added 28,000 jobs, but the goods producing sector lost 51,000 jobs.

For a look at what February’s ADP report showed, click here.

Large businesses dropped 7,000 from their payrolls, small businesses cut 12,000, and medium businesses shrank payrolls by 4,000 workers, according to the report, prepared in partnership with Macroeconomic Advisors. The report is derived from payroll data and measures the change in total non-farm private employment month to month.

(For the purposes of the report, large businesses are those with more than 499 employees, medium businesses are those with 50 to 499 employees and small businesses are those with one to 49 employees.)

"American businesses are on the cusp of recovery yet this report shows that they remain hesitant to increase their payrolls," said Gary Butler, president and CEO of ADP, in a statement.  

He pointed out that the recently signed federal HIRE Act provides immediate incentives to employers for every job they create.

"The HIRE Act and similar incentives are necessary to expand payrolls and reverse the trend in private sector employment," he said.

Yet the employment report for March showed a continuing narrowing of job declines, noted Joel Prakken, chairman of Macroeconomic Advisors.

"The March employment decline was the smallest since employment began falling in February of 2008," he said in a statement. "Yet, the lack of improvement in employment from February to March is consistent with the pause in the decline of initial unemployment claims that occurred during the winter."

Prakken said that the U.S. Bureau of Labor Statistics report that will be released on Friday may very well look stronger than ADP’s data because it will include federal hiring in March for the 2010 U.S. Census and because the ADP report does not include the effects of recent bad weather.

Within the subset of small businesses, ADP noted that the service-providing sector added 15,000 jobs while the goods-producing sector lost 27,000 jobs for a net job loss of 12,000. The increase in jobs in the service-providing sector marked the third consecutive monthly increase and the highest job growth since March of 2008, according to Prakken.

ADP’s reports are derived from the company’s payroll data, which averaged over 360,000 U.S. business clients and represented over 22 million U.S. employees over the last 12 months.  This approximately represents the size of the matched sample used this month, the company said.

This article was originally published on 2010-03-31