Has US companies cut 4,91,000 jobs during April 2009?

In a possible sign that the worst may be over for the country's labour market, a new report shows that American private companies slashed as many as 4,91,000 jobs in April, much less than expected.

The latest ADP National Employment Report showed that non-farm private employment fell 4,91,000 from "March to April 2009 on a seasonally adjusted basis".

Experts were expecting that the decline would be more than 6,00,000.

"The estimated change of employment from February to March was revised by 34,000, from a decline of 742,000 to a decline of 7,08,000," ADP said in a statement on Wednesday.

According to the report, private employment in the service-providing sector plunged by 2,29,000 in April. During the same period, jobs in the goods-producing segment decreased 2,62,000 while that in the manufacturing sector dropped by 1,59,000.

Last month, construction employment dropped 95,000, which was also the "smallest" in nearly six months.

"This was its twenty-seventh consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,261,000. April's decline, however, was the smallest since November of 2008," the statement said.

Large businesses, defined as those with 500 or more workers, witnessed their employment decline by 77,000 whereas medium-size businesses -- having between 50 and 499 workers -- skid by 2,31,000.

Further, small-size entities, which have less than 50 workers, saw a fall of 1,83,000 in employment.

"The employment declines among medium-and small-size businesses
indicate that the recession continues to spread beyond manufacturing and housing-related activities to almost every area of the economy," it noted.

The report sponsored by ADP is maintained by Macroeconomic Advisers, LLC and it is a measure of employment derived from an anonymous subset of roughly 5,00,000 US business clients.

In the last six months of 2008, the subset represented nearly 4,00,000 US business clients representing nearly 24 million American employees working in all private industrial sectors, ADP said.

Agencies

India's factory output falls for first time in 13 years

India's factory output fell for the first time in more than 13 years in October, further evidence of a rapid economic slowdown which could spark more monetary easing by the Reserve Bank of India (RBI) after aggressive weekend rate cuts.

Industrial output declined 0.4 percent in October from a year earlier, the first annual drop since data in the current series became available in April 1995, and sharply below the previous month's upwardly revised 5.5 percent.

The figure was below a forecast for growth of 2.2 percent in a Reuters poll of economists. Manufacturing production in Asia's third-largest economy fell 1.2 percent from a year earlier, data showed on Friday.

"It is a shocking figure and only underlines the fact that the Indian economy is in a very bad situation," said T.K. Bhaumik, economist at JK Industries Group. "This is a wake up call for the government."

Bhaumik called on the government to consider additional stimulus to that announced at the weekend and to use fiscal measures to lift consumer demand. Lending banks should move fast to pass on the RBI's recent rate cuts.

"Since the RBI has already done its job, now commercial banks should be fast to ease the credit line," he said referring to the Reserve Bank of India.

The Reserve Bank of India (RBI) Governor Duvvuri Subbarao has said India faces a period of painful adjustment after the global financial crisis froze credit markets in October, further weakening an economy struggling with high borrowing costs.

Subbarao said the bank's growth forecast for 2008/09 was likely to be cut from 7.5-8.0 percent. Many private economists expect it to dip below 7 percent.

The RBI cut its main rates by 1 percentage point on Saturday, lowering its key lending rate for the third time since October, and has indicated that it was ready to act again to bolster an economy slowing much faster than expected.

The government followed up with an additional $4 billion in additional spending to stimulate activity. The benchmark 10-year bond yield plunged to its lowest in more than four years after the data was published on increased expectations of further central bank action.

Industrial output rose 8.1 percent in the 2007/08 (April-March) fiscal year, compared with 11.6 percent in 2006/07.

Source: Agencies