Posted by Joseph Y. Calhoun, III

ADP reported today that private employment fell by 203,000 in September:

Nonfarm private employment decreased 203,000 from September to October 2009 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from August to September was revised by 27,000, from a decline of 254,000 to a decline of 227,000.

October was the seventh consecutive month during which the decline in employment was less than in the previous month. Nevertheless, despite recent indications that overall economic activity is stabilizing, employment, which usually trails overall economic activity, is likely to decline for at least a few more months.

October’s ADP Report estimates nonfarm private employment in the service-providing sector fell by 86,000. Employment in the goods-producing sector declined 117,000, with employment in the manufacturing sector dropping 65,000.

Large businesses, defined as those with 500 or more workers, saw employment decline by 53,000, while medium-size businesses with between 50 and 499 workers declined 75,000. Employment among small-size businesses, defined as those with fewer than 50 workers, declined 75,000. Employment losses among small-size businesses were the smallest since July of 2008.

In October, construction employment dropped 51,000. This was its thirty-third consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,675,000. Employment in the financial services sector dropped 18,000, the twenty-third consecutive monthly decline.

The consensus for Friday’s BLS report is a drop of 175,000 so this is consistent with expectations. The rate of job loss is still slowing but agonizingly so. At the current rate of improvement, job growth will probably show up sometime in the first quarter.