By Courtney Schlisserman
July 1 (Bloomberg) -- Companies in the U.S. cut more jobs than forecast in June, according to a private report today, showing the labor market will be slow to improve even as other parts of the economy indicate the recession is abating.
The 473,000 drop in the ADP Employer Services gauge followed a revised reduction of 485,000 workers in May that was smaller than previously estimated.
Job losses may mount as the bankruptcies of General Motors Corp. and Chrysler LLC ripple through manufacturing. Increased firings threaten to further restrain consumer spending at a time when the world’s largest economy is showing signs of stabilizing.
“The labor market is still pretty lousy,” Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York, said before the report. “The underlying conditions are still pretty terrible.”
Economists forecast the ADP report would show a decline of 395,000 jobs, according to the median of 29 estimates in a Bloomberg News survey. Projections ranged from decreases of 280,000 to 532,000.
A Labor Department report tomorrow may show employers cut 363,000 workers from payrolls in June and unemployment rose to a 26-year high of 9.6 percent. The increase from May’s 9.4 percent jobless rate would be the smallest since November 2008.
Job cut announcements in June fell 9 percent to 74,393, the fewest in more than a year, from 81,755 in June 2008, Chicago- based placement firm Challenger, Gray & Christmas Inc., also reported today. It was the first year-over-year decrease since February 2008.
To contact the reporter on this story: Courtney Schlisserman in Washington email@example.com
Last Updated: July 1, 2009 08:17 EDT