Posts Tagged ‘ADP’

Unemployment Down, but Hiring Outlook Still Bleak

Tuesday, February 9th, 2010

Although January’s unemployment figure dropped from 10% to 9.7%, other sources are not so optimistic about future hiring. Temporary staffing and payroll processing firms are among those reporting few positive indicators for hiring boosts in the near future.

ADP, a payroll processing company for US employers, issued a report that 22,000 private sector jobs were lost in January, 2010. Goods-producing sector jobs fell 60,000 while the service sector lost 38,000 jobs to arrive at the total. Within the two main categories, small business employment fell by 12,000, and manufacturing lost 25,000 jobs.

Unemployment has tracked high for the manufacturing and construction sectors for over two years now, with 1.9 million construction jobs lost since December 2007. The ripple effect of 15 million Americans out of work is continued lower consumer spending, which means employers don’t need more workers.

There are a few good-news items in the ADP figures: first, the service sector’s 38,000 jobs gain is the second straight monthly increase. Second, the overall drop of 22,000 month-to-month is the lowest decline since employment started falling in February 2008. Third, medium-sized businesses actually grew employment by 9,000.

Kelly Services, Inc., a temporary staffing firm, reported a loss in revenue and profit for the 4th quarter 2009 over the same period in 2008; however, revenue was up from the third quarter 2009. This could be a positive indicator; temp staffing services often see increases in business prior to full time job boosts.

The construction industry is still being hit hard. According to the United States Labor Department, construction saw 75,000 jobs lost in January. A bright spot in the Federal report is manufacturing, with an 11,000 job loss—much smaller than the drops seen in 2009. Motor vehicles and plastics/rubber were two areas that increased jobs, by nearly 30,000 total.

While unemployment figures for January were better than expected, hiring will likely not occur on a large scale until consumer spending bounces back—and that’s not likely until employers start hiring again in a big way. Stay tuned for updates as they come.