Jobs: Finally, a little less gloom
ADP says there were 31% fewer private sector job losses in April, while outplacement firm says pace of layoffs slows.
NEW YORK (CNNMoney.com) -- The pace of U.S. job losses may be slowing, according to two private reports released Wednesday.
Automatic Data Processing, a payroll-processing firm, said private-sector employment decreased by 491,000 in April, a 31% improvement from the revised 708,000 drop in March.
Economists surveyed by Briefing.com had expected a loss of 643,000 jobs last month.
The report, which is based on payroll data from 500,000 U.S. businesses, showed the number of job cuts declined across all sectors in the survey.
"There's a sense here of a turn, which is good news" said Joel Prakken, an ADP spokesman and chairman of Macroeconomic Advisers, LLC. But the job market "is likely to decline for at least several more months, although perhaps not as rapidly as during the last six months."
Separately, outplacement firm Challenger, Gray & Christmas Inc. reported that the number of layoffs announced in April fell for the third straight month.
Job cut announcements by U.S. employers totaled 132,590 in April, an improvement of 12% from March's 150,411 cuts. It was the lowest total since last October, according to Challenger, but the April figure was still 47% higher than job cuts announced in the same month a year ago.
The government/non-profit sector was hit the hardest for the second month in a row, Challenger said, with 27,624 announced job cuts in April. The automotive industry had the second highest tally of planned cuts, thanks in part to further cuts announced at General Motors.
"Job cuts are still at recession levels, but the fact that they are falling is certainly promising and may suggest that employers are starting to feel a little more confident about future business conditions. Hopefully, the next few months will bring further relief, as we tend to see downsizing activity slow during the summer months," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.
Employers have announced 711,100 job cuts so far this year. That is 145% percent higher than the 290,671 job cuts announced in the first quarter of 2008, Challenger said.
The reports set the tone for the government's monthly jobs report due Friday. The Labor Department report is expected to show that the economy shed 620,000 jobs in April, less than the 663,000 reported for March, according to a consensus estimate of economists complied by Briefing.com. The unemployment rate is predicted to rise to 8.9% from 8.5%.