US private employers hire fewer people, Ford to cut 1,400 jobs - GulfToday

US private employers hire fewer people, Ford to cut 1,400 jobs

US private payrolls miss forecast; Ford to cut 1,400 jobs

A man walks past a sign ‘Now Hiring’ in front of a store in Arlington, Virginia. Agence-France-Presse

WASHINGTON: US private employers hired fewer workers than expected for a second straight month in August, suggesting that the labour market recovery was slowing as the COVID-19 pandemic drags and government money to support workers and employers dries up.

Large businesses accounted for the bulk of the job gains shown in the ADP National Employment Report on Wednesday, with small enterprises posting a modest increase. A $600 weekly unemployment supplement expired on July 31, while a programme that gave businesses loans that can be partially forgiven if used for employee pay has also lapsed.

Private payrolls increased by 428,000 jobs last month. Data for July was revised up to show hiring gaining 212,000 jobs instead of the initially reported 167,000. The revision still left the July tally out of alignment with the 1.462 million rise in private employment reported by the government last month.

Economists polled by Reuters had forecast private payrolls would increase by 950,000 in August.

The ADP report, jointly developed with Moody’s Analytics, has fallen short of the government payrolls count since May because of methodology differences. The ADP report is based on active employees on company payrolls.

The labour Department’s Bureau of labour Statistics (BLS) counts a worker as employed if they received a paycheck during the week that includes the 12th of the month.

When businesses were shuttered in mid-March, millions of workers were either laid off or furloughed. Some economists believe that the return of furloughed workers when most businesses reopened in May boosted the employment numbers reported by the government.

Moody’s Analytics chief economist Mark Zandi told reporters he expected the gap between the ADP and BLS private payrolls narrowed in August. The government is scheduled to publish August’s employment report on Friday.

According to a Reuters survey of economists, private payrolls probably increased by 1.265 million jobs in August after rising 1.462 million in July. Such a gain would result in nonfarm payrolls advancing by 1.4 million jobs last month after increasing 1.763 million. That would leave nonfarm payrolls about 11.5 million below their pre-pandemic level.

Wall Street stocks opened higher Wednesday despite lackluster US employment data, adding to records amid bullish investor sentiment for equities.

About 15 minutes into trading, the Dow Jones Industrial Average was up 0.6 percent at 28,821.09.

The broad-based S&P 500 gained 0.6 percent to 3,546.94, while the tech-rich Nasdaq Composite Index advanced 0.7 percent to 12,026.86.

Both the S&P 500 and Nasdaq finished at records Tuesday, riding a wave of positive sentiment based on expectations for a solid US economic recovery from the coronavirus.

The data comes ahead of Friday’s much-anticipated government employment report for August.

The moderation in job growth suggested by the ADP report is in line with other labour market indicators. Weekly new applications for unemployment benefits are hovering around 1 million. Data from Kronos, a workforce management software company, showed an increase in shifts in August, but the rise was heavily influenced by the late summer return to school.

Adjusting for back-to-school seasonality, weekly shifts fell on average. Data from Homebase, a payroll scheduling and tracking company, showed little change in employment in August from July.

Large businesses accounted for 298,000 jobs last month, while small business payrolls increased 52,000.

Most of the increase in employment last month was in industries directly impacted by the pandemic, including restaurants, leisure and hospitality. There were also gains in temporary help, reflecting the uncertain economic environment. Ford to cut 1,400 jobs: Ford Motor Co. will offer early retirement incentives with hopes of cutting its US white-collar workforce by 1,400 more positions.

Kumar Galhotra, the company’s president of the Americas, told employees about the offers Wednesday morning. The company says they’re part of an $11 billion restructuring plan that started more than a year ago.

Most of the reductions would take place in the area of Dearborn, Michigan, where Ford has its headquarters and large product development and engineering operations.

A spokesman says Ford expects to meet its goals with the offers. If it doesn’t, then it may consider involuntary separations.


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