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US economy 'bleeds private jobs, payrolls slashed'

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The US economy entered 2009 shedding more than a half million jobs in the private sector and employers announced a near-record number of layoffs, two reports showed Wednesday. Non-farm private jobs fell a seasonally adjusted 522,000 in January from the prior month as the world's largest economy entered a second year of recession, according to a report by private payrolls firm, Automatic Data Processing (ADP).

A separate report by Challenger, Gray & Christmas consultancy said 241,749 planned layoffs were announced in January, the largest monthly total since January 2002, when job cuts hit an all-time high of 248,475. The grim data came ahead of the government's report on January unemployment, due Friday. The highly anticipated labor data is considered a key indicator of economic momentum. Private economists on average expect the Labor Department to report the unemployment rate jumped to 7.5 percent from December's 16-year high of 7.2 percent.

ADP lowered its December job loss figure to 659,000, from an initial estimate of 693,000. The service sector, which accounts for nearly 85 percent of nonfarm employment in the US, shed 279,000 jobs in January, after 415,000 in December, according to the ADP National Employment Report. Employment in the goods-producing sector, in steady decline for two years, lost 243,000 jobs in January. The hard-hit manufacturing sector shed 160,000 jobs, after losing 244,000 in December.

"There can be few doubts that the disaster in the labor market continues, with firms of all sizes and in all sectors cutting jobs. Manufacturing is being hit hardest, with the pace of job losses trebling since September, but nowhere is safe," said Ian Shepherdson, chief US economist at High Frequency Economics.

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