Economy Watch: ADP Reports Middling Job Growth; BoA, Army Cause Layoff Surge

October 6, 2011
Dees Stribling, Contributing Editor

Courtesy Flickr Creative Commons user autiscy

It’s employment-report week, and always first out of the gate — ahead of even the federal government employment numbers — is Automatic Data Processing’s National Employment Report, which was released on Wednesday. According to ADP, private U.S. businesses hired a net of 91,000 workers in September, a little up from August’s revised figure of 89,000. This figure may or may jibe with the official numbers.

Not bad, but no great shakes for an economy that needs jobs more than anything else. The report broke hiring down by various categories, reporting that the service sector created almost all of the net increase, some 90,000 jobs, while goods-producers hired only an additional 1,000 workers. Small businesses (one to 49 employees) hired 60,000 workers, while medium businesses (50-499 workers) hired 36,000. Large businesses with more than 500 employees fired a net of 5,000 workers in September.

“Small businesses overall showed positive growth for the 22nd straight month and averaged 73,000 jobs a month for the past 12 months,” Gary C. Butler, CEO of ADP, in a statement. “Professional business services, education and healthcare and leisure services led all other sectors in new jobs added.”

Bank of America, Army Cause Surge in Planned Layoffs

Challenger, Gray & Christmas reported that mass layoffs planned by employers spiked in September to the highest level in over two years, to more than 115,700 workers. Total planned layoffs were 37,100 in August.

That sounds like grim news, and it is for about 115,700 workers, but it doesn’t represent a massive surge in layoffs throughout the economy. Much of the total for the month comes by way of Bank of America, which plans to lay off about 30,000 workers in the next few years — or about 10 percent of its staff, perhaps concurrent with its plan to drive away debit-card-using customers — and by troop reductions by the U.S. Army of about 50,000.

The cuts “could definitely be a sign of more cuts to come,” John A. Challenger, CEO of Challenger, Gray & Christmas, said in a statement. “Bank of America is not the only bank still struggling in the wake of the housing collapse, and the military cutbacks are probably just the tip of the iceberg when it comes to federal spending cuts.”

Non-Manufacturing Still in Modest Growth Mode

The latest Non-Manufacturing ISM Report On Business, released on Wednesday, reported that economic activity in the non-manufacturing sector grew in September for the 22nd consecutive month, though at a little slow pace. The Non-Manufacturing Index was 53 during the month, compared with 53.3 in August. Nine non-manufacturing industries reported growth in September, but purchasing managers nevertheless reported great uncertainty about the direction of the economy.

Wall Street scored another positive day on Wednesday, with the Dow Jones Industrial Average up 131.24 points, or 1.21 percent, and the S&P 500 gaining 1.79 percent. The Nasdaq broke even.

The death of Steve Jobs on Wednesday evoked a torrent of commentary almost immediately, via the Internet — something he himself had helped make possible with Apple’s pioneering of stylish, easy-to-use computers. It isn’t considered likely that his passing will have any short-term impact on Apple, though Jobs’ gift for innovation will certainly be missed over the years to come.