Private employers cut 298,000 American jobs last month, far above economists’ expectations, and squeezed more work out of staff over fewer hours.
The ADP Employer Services report on jobless numbers in August exceeded the 250,000 staff cuts economists had forecast.
Employees who kept their jobs worked even harder over shorter hours, according to the Labor Department today.
Revised productivity figures, which show the amount of output per hour of work done, rose by an annual rate of 6.6 per cent in the second quarter, the biggest rise in nearly six years.
Labour costs fell by 5.9 per cent as a result of the rise in productivity. It was the largest drop in costs since the second quarter of 2000.
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The department had estimated last month that second quarter productivity was up by 6.4 per cent and costs down by 5.8 per cent.
The ADP Employer Services report is published two days before the US Labor Department’s own figures, which include Government jobs and are usually less dire than those reported by ADP.
Macroeconomic Advisers, the economics consultancy that works with ADP on the employment report, said that it expected the Government to have added about 2,000 workers, taking the number of job losses to 296,000 across the US workforce in August.
The unemployment rate is expected to rise to 9.5 per cent in August, up from 9.4 per cent in July, and hit 10 per cent by year-end.
The Labor Department said last month that 247,000 jobs were lost in July.
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The ADP Employer Services report today revised down the number of jobs lost in July from 371,000 to 360,000.
Orders to US factories rose by 1.3 per cent, according to the Commerce Department. It was the fifth monthly increase in the past six months but lower than economists’ expectations of a 2.2 per cent rise.
An 18.5 per cent leap in orders for transport-related products such as commercial aricraft and parts was the force behind the rise.
Durable goods, which includes all products expected to last at least three years, were up 5.1 per cent but non-durable goods such as food and petrol were down 1.9 per cent as oil prices fell.
Further good news came from the Institute for Supply Management, which said that its index rose to 52.9 points in August, up from 48.9 in July.
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It is the first time the index has risen above 50 since January 2008, boosted by the reopening of General Motors’ and Chrysler factories that had been shut since the automakers entered bankruptcy protection. A 50-plus reading means that the manufacturing sector is expanding.