The long period of brutal monthly private sector job losses appears to be ending, as the private sector added 43,000 jobs in October, ADP (ADP) announced Wednesday, more than twice the number expected.

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.

Economists monitor monthly job reports because job creation is positively correlated with corporate revenue and earning gains. And, in general, the U.S. stock market follows corporate earnings.

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.

Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Introduction to Retirement Funds

Target date funds help you maintain a long term portfolio.

View Course »

Add a Comment

*0 / 3000 Character Maximum

3 Comments

Filter by:
marine1942

Sorry, just cannot believe government reports ( like zero inflation ).

November 03 2010 at 6:48 PM Report abuse +1 rate up rate down Reply
pgile

Does the author read what he writes? "The long period of brutal, monthly private sector job losses appears to be ending," "Private employers added 10,000 jobs in August, and 37,000 jobs in July."

November 03 2010 at 12:34 PM Report abuse -1 rate up rate down Reply
1 reply to pgile's comment
sfamilyent

We are continuing the shift from good paying jobs to lower paying service jobs... Gaining jobs this way is not as good as it would be if we were adding construction, manufacturing and production jobs. This is not a good trend for our general economy.

November 03 2010 at 11:36 AM Report abuse +3 rate up rate down Reply