Equally significant, September's job loss was substantially revised, from an initial estimate of 39,000 down to just 2,000.
A Bloomberg survey had expected private employers to add 20,000 jobs in October. Private employers added 10,000 jobs in August, and 37,000 jobs in July.
ADP said investors should expect several more months of modest private sector job increases, given the current economic growth rate. "Given modest GDP growth in the second and thirds quarters, and the usual lag of employment behind GDP, it would not be surprising to see several more months of lethargic employment gains, even if the economic recovery gathers momentum," ADP said.
Another Difficult Month for Construction
According to the ADP report, job losses by business size were: a loss of 2,000 in large businesses, but gains of 24,000 in medium and 21,000 in small businesses.
In October, construction employment declined 23,000, bringing the number of jobs lost in the sector since the January 2007 peak to 2.31 million. Financial services lost 2,000 jobs, the goods-producing sector lost 34,000 and manufacturing lost 12,000 -- the latter being the sector's second straight monthly decline. On the positive side, the service sector added 77,000 jobs – its ninth straight monthly gain.
The job losses in the private sector appear to be ending, but the pace of growth still isn't strong enough. So, policymakers will likely remain focused on job creation. The U.S. economy needs to create 100,000 to 125,000 jobs to keep the unemployment rate, currently a very high 9.6%, from rising further and to keep the economy growing adequately.
Separately, private placement firm Challenger, Gray & Christmas said planned layoff announcements by U.S. employers rose 2.3% to 37,986 in October from 37,151 in September, ajc.com reported Wednesday. However, October's jobs cuts are down 31.7% compared to October 2009's 55,679l. On a year-to-date basis, jobs cuts are down 62.4% compared to the first 10 months of 2009. So far in 2010, employers have announced 449,258 job cuts, down from 1,192,587 compared to the same period for 2009.