A Bleak Outlook: Nov. Job Loss, Economic Weakness
A brief pause for roasted turkey and mashed potatoes marked the only relative bright spot in an otherwise bleak month for American workers. November was filled with financial concern and employment markets bleeding job losses at alarming rates, according to monthly reports released this week. Private sector employment decreased by 250,000 in November, according to a monthly National Employment Report released Wednesday by Automatic Data Processing Inc. (ADP) in partnership with Macroeconomic Advisers LLC. The report is based on actual payroll data and measures the change in total non-farm private employment each month, according to the ADP. Small business employment (representing payrolls with one to 49 employees) was down 79,000 in November. Medium business employment (50 to 499 employees on payroll) dropped 130,000, while large business employment fell 41,000. "Falling employment at medium and small firms clearly indicates that the recession has now spread well beyond manufacturing and housing-related activities,” said Macroeconomics chairman Joel Prakken in the report. “This month’s employment loss was again driven by the goods-producing sector which declined 158,000 during November, its twenty-fourth consecutive monthly decline," Prakken said. "The manufacturing sector marked its twenty-seventh consecutive monthly decline, losing 118,000 jobs. These losses were compounded by an employment decline in the service-providing sector of the economy which fell by 92,000....” Construction employment alone fell 44,000, it's 24th consecutive monthly decline, he said. Read the report. The Institute for Supply Management (ISM) also agreed economic activity in the non-manufacturing sector contracted in November, according to its latest Non-Manufacturing ISM Report on Business. The Non-Manufacturing Index, released Wednesday, fell to 37.3 percent in November from 44.4 percent in October, the largest-ever one-month decline to the index's lowest level since it was first reported in 1997. Read the report. The dive in the ADP's data represented the largest decrease in private sector employment since November of 2002, near the end of the last recession. The ADP's graphic representation of employment growth [featured above] does not depict the information released Monday by the National Bureau of Economic Research that confirmed the U.S. has been in recession for roughly 12 months. The committee met by conference call on Friday and determined that a peak of economic activity in the U.S. had occurred in December 2007 and economic activity has fallen since. That peak “marks the end of the expansion that began in November 2001 and the beginning of a recession,” the committee said in Monday’s press release. A recession is defined by the committee as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income, and other indicators. In the midst of this recession, struggling homeowners -- and particularly those who might be affected by job losses in November -- increasingly find themselves unable to afford mortgage payments. Severe delinquencies among mortgage holders increased more than 50 percent from year-ago levels during the third quarter, according to data released Tuesday by credit reporting agency TransUnion LLC. At the end of the third quarter, 3.96 percent of homeowners were 60+ days in arrears, compared to 2.56 percent one year earlier; historically, the severe delinquency rate has held the line at roughly 2 percent. With so many economic factors working against the American homeowner, it reasonably follows that morale would be low in November, as reported in a HarrisInteractive study released Tuesday. The Harris Poll, a new study of 2,126 U.S. adults surveyed in November, showed that attitudes on the economy remain bleak. When the study’s participants were asked to project their financial situation six months from now, one-third said they believed their condition will worsen and 43 percent predicted it would remain the same. While almost one-quarter of Americans are still hopeful their financial situation will improve over the next six months, it’s a far less optimistic crowd than in July, when 36 percent of participants believed things would get better. “The American sense of optimism has faded to despair and is deepening every day that the economic crisis continues,” said HarrisInteractive in a press release Tuesday. Write to Diana Golobay at email@example.com.