Good NewsBy Reuters - | Posted 2008-11-05 Print
Privately released reports on Wednesday highlighted the economic challenges facing Barack Obama a day after he won the race for the White House and foreshadowed weakness in the government's U.S. labor market report due out. Private employers made their deepest job cuts in six years last month and companies' planned layoffs surged to their highest in nearly five years.
The lone outlier of good news in the ISM report was that inflation pressures also fell sharply, which should allow the Federal Reserve -- the U.S. central bank -- more leeway in its efforts to stimulate the moribund economy with low interest rates and measures to support the credit markets.
U.S. private employers cut a larger-than-expected 157,000 jobs in October in a deteriorating labor market that will get worse in the months ahead, according to a report by ADP Employer Services.
ADP also said it revised the number of jobs lost in September to 26,000 from the originally reported loss of 8,000. The ADP Employer Services report was jointly developed with Macroeconomic Advisers LLC.
ADP said the private sector job losses in October were the highest since November 2002. Joel Prakken, chairman of Macroeconomic Advisers, said it was "entirely likely" to start seeing job losses of 200,000 per month.
"This is a weak number by any reckoning," Prakken told a teleconference of journalists about the report.
"It would not to surprise me all at this point to see many more months of declines ... that are comparable to this one if not even somewhat larger and I wouldn't expect to see a turnaround ... until sometime in the second half of next year."
A report by outplacement firm Challenger, Gray & Christmas showed job cuts announced in October totaled 112,884, up 19 percent from September, citing evidence of widespread economic malaise as troubles that began in housing and banking infect the rest of the economy.
October represented the year's worst month for job cuts for several industries, said Challenger, including industrial goods manufacturing, consumer products, pharmaceutical, food and electronics.
(Editing by James Dalgleish)
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