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(CEP News) - Private non-agricultural employment in the United States fell by 79k jobs in June, according to a report released from Automatic Data Processing Inc. on Wednesday morning. That marks the worst decline on record since November 2002. The previous month's data was revised down to a 25k gain from an originally reported 40k advance.
The figure was worse than expectations looking for a pullback of 20k jobs. Forecasts prior to the release ranged from a decline of 90k to a gain of 50k. June's decline follows three months of upside surprises. The service providing sector was responsible for a -3k decline in employment, marking the first decline since November 2002, while jobs in the goods producing sector fell 76k and manufacturing pulled back 44k. "This month's decrease in employment was broad based across industrial sectors and suggests continued weakness in employment," the report stated. Speaking on CNBC, Joel Prakken, chairman of Macroeconomic Advisors, said the number is not recessionary. He said the first half of the year has dodged a recession but that the second half of the year could be dangerous, as rising oil prices are an increasing concern. Prakken said he won't be surprised to see additional declines in the coming months. The report noted that employment in the construction sector declined 34k in June, marking the 19th consecutive monthly decline. Relative to previous months, the ADP figures stand more in line with expectations for Friday's nonfarm payrolls report from the Bureau of Labor Statistics, the benchmark employment figure for the United States, which economists expect to report a drop of 60k. Large businesses saw employment decline 51k while medium-size companies fell by 35k and small-sized businesses saw an advance of 7k during the month. Prior to the release, BMO Capital Markets' senior economist Sal Guatieri said, "What was once the best measure of monthly payrolls has lost its glitter, overstating the change in nonfarm payrolls in each of the past seven months (by an average 87,000)." By Patrick McGee,
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