Special Report Your Job

Private sector still losing lots of jobs

Payroll-processing firm says 254,000 jobs were lost in September, more than expected but down slightly from August.

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NEW YORK (CNNMoney.com) -- Private sector employment fell more than expected in September, but the pace of job losses continued to slow, according to a report released Wednesday.

Automatic Data Processing, a payroll-processing firm, said private-sector employers cut 254,000 jobs in September, down from a revised 277,000 in August. It was the smallest monthly total since July 2008.

The decline was greater than the 200,000 loss economists surveyed by Briefing.com had forecast. But the difference was "not statistically meaningful," according to Joel Prakken, an ADP spokesman and chairman of Macroeconomic Advisers, LLC.

"The pattern of improvement in headline number is undeniable at this point," Prakken said. Private sector payrolls will continue to decline at a slowing rate for the next few months before modest job growth resumes "in the first few months of 2010," he added.

Large businesses, those with 500 or more workers, let 61,000 workers go. Medium-sized businesses, with between 50 and 499 workers, shed 93,000 jobs. And small businesses, those with less than 50 workers, reduced payrolls by 100,000.

Small businesses held will continue to shed more workers than larger and medium-sized firms, Prakken said. That's because large businesses started shrinking payrolls earlier and therefore will recover sooner, he explained.

The goods-producing sector cut 151,000 jobs in September, while the service sector shed 103,000 jobs. Employment in the manufacturing sector dropped by 74,000 jobs.

The pattern of gradual improvement in the job market has been "fairly wide spread," Prakken said. But employment in the construction and manufacturing sectors will remain weaker than the service sector, he added.

Public sector employment, which ADP excludes from its report, is expected to decline significantly due to "pressure on states to cut costs and meet budgets," Prakken said.

ADP based its report on payroll data from about 500,000 employers across a broad range of industries.

The report is seen as a precursor to Friday's closely watched jobs report from the U.S. Labor Department.

That report is expected to show that the economy shed 180,000 jobs in September, down from the 216,000 reported for August, according to a consensus estimate of economists compiled by Briefing.com. The unemployment rate is predicted to rise to 9.8% from 9.7%. To top of page

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