Weak U.S. Private Sector Employment Clouds Recovery Outlook

Private sector layoffs narrowed in November for the eighth consecutive month, but the improvement was less than expected, a survey showed on Dec. 2. Payrolls firm ADP said the nonfarm sector lost 169,000 jobs last month, 26,000 fewer than in October.

The reading was worse than the 150,000 job losses expected by most analysts. "Although overall economic activity is stabilizing, employment usually trails economic activity, so it is likely to decline for at least a few more months," ADP said.

Job losses in the goods-producing sector dropped to 88,000 from 116,000 in October, with employment in the manufacturing sector falling 44,000, the smallest decline since May 2008. The vast services sector, representing more than 85% of nonfarm employment, shed 81,000 jobs in November, up from 79,000.

In a separate report, outplacement firm Challenger, Gray & Christmas said that employers planned job cuts in November fell 9.6% from October to 50,349, the fewest number since December 2007, when the U.S. economy officially entered recession. "Most industries are seeing job cuts subside. Barring any unexpected shocks to the economy, we appear to be coming out of the woods when it comes to downsizing. Unfortunately, the second half of the job market equation -- hiring -- has not shown any signs of an imminent rebound," said chief executive John Challenger.

The ADP report came a day before President Barack Obama hosts a high-profile "jobs forum" at the White House to tackle elevated unemployment that threatens to derail the recovery. On Dec. 3 Obama will gather business leaders, including Google chief executive Eric Schmidt and Walt Disney CEO Bob Iger, Nobel economics laureates Joseph Stiglitz and Paul Krugman and labor chiefs to the White House to discuss job creation.

The administration argues that a $787 billion economic stimulus plan passed in February has likely saved or created a million jobs, and prevented an even worse unemployment crisis. But Republicans allege the White House is massaging the figures and has done more to safeguard federal government jobs rather than create new ones in the private sector.