ADP Reports 693,000 Private-Sector Jobs Lost in December

From the Wall Street Journal:

Private sector jobs fell 693,000 in the U.S. in December, according to a revamped national employment report published Wednesday by payroll giant Automatic Data Processing Inc. and consultancy Macroeconomic Advisers.

That’s far higher than the 515,000 loss forecast in a Dow Jones Newswires survey.

The December ADP survey is the first to incorporate a major overhaul of the methodology, including new regressions. The changes were introduced because the ADP survey has underestimated the monthly number of job losses as reported by the Bureau of Labor Statistics since the recession began in December 2007.

For instance, under the old calculations, the ADP Survey showed a loss of 250,000 private-sector jobs in November. The new methodology shows a 476,000 job drop in November, closer to the 533,000 reported by the BLS.

The ADP survey tallies only private-sector jobs while the BLS data include government workers. Based on recent public-sector job growth, Wednesday’s ADP report suggests December nonfarm payrolls will show a loss of at least 650,000 when the BLS reports the data on Friday.

The new report showed businesses with 500 employees and more shed 91,000 jobs and medium-sized businesses lost 321,000 jobs in December. Small businesses that employ fewer than 50 workers cut 281,000 jobs.

Manufacturing employment dropped 120,000 in December, while service sector jobs fell 473,000.