US job losses spread to small firms
The economy shed 697,000 workers last month, a new ADP report finds.
The US lost 697,000 jobs last month, according to a new private report, with a pronounced decline in small-business jobs suggesting that the recession is deepening.
The job loss was the highest ever reported by the ADP National Employment Report, which was released Wednesday morning. On Friday, the Bureau of Labor Statistics will release the official unemployment figures for February, which are also expected to show spreading unemployment.
"As bad as this is, it's not a surprise," said Joel Prakken, chairman of Macroeconomic Advisers, which produced the report in conjunction with Automatic Data Processing. But "this is no longer a story about big multinational companies cutting fat.... You're seeing large declines of employment in small- and medium-sized firms."
Normally, small firms are the least vulnerable to cyclical ups and downs in the economy. But last month, they shed 262,000 workers. Medium-sized firms lost 314,000 workers; large companies lost 121,000.
"For small businesses, something happened last fall," Mr. Prakken said. "The financial crisis worsened. The holiday season failed to ride to the rescue.... A lot of small businesses threw in the the towel and decided they weren't going to be able to scrape by this time."
Overall, the manufacturing sector lost 219,000 workers last month, the report said, marking three years of consecutive month-to-month declines.