by Oliver Fultz
2. October 2009 08:34
In the latest ADP National Employment Report, US companies cut jobs by 254,000 between August and September 2009. However, this is considered a sign of improvement in the job market: it is the lowest number of jobs cut since July of 2008.
Automatic Data Processing (ADP), a private company, calculated these figures based on a subset of payroll data collected from about 400,000 of their customers, which reflects 23 million US workers. The company’s payroll services are used to pay 1 out of every 6 employees in the United States, so their findings are considered an accurate reflection of changes in US employment.
While the latest figures suggest that the labor market is slowly improving compared with earlier this year, it remains weak. According to the Wall Street Journal, economists expect the unemployment rate to hit 9.8% in September, up from 9.7% in August.
How long will it be until the trend reverses, and companies start hiring more people then they fire? No one knows. The Federal Reserve said last week that sluggish income growth and tight credit are curbing household spending and slowing the pace of the recovery. According to Rutgers University economists Jim Hughes and Joseph Seneca, it could take the United States more than 7 years to recover from the nation’s worst employment decline since the Great Depression. This means we will have to wait until 2017 before employment rates return to the levels of 2007.