Report: Small Businesses Slashing Jobs
Small and medium-sized businesses cut hundreds of thousands of jobs in the month of December, according to a jobs report released by Automatic Data Processing, Inc. (ADP).
The Roseland, N.J.-based payroll firm's report estimated that the economy shed 693,000 jobs total in December, with almost 600,000 of those losses coming from companies with less than 500 employees.
According to Joel Prakken, chairman of Macroeconomic Advisors, a St. Louis, Mo.-based research firm responsible for preparing ADP's monthly employment report, large firms with 500 or more employees had experienced greater job losses in recent months.
"The severity of job losses in recent months among small-sized businesses has been less than that at larger-sized ones," Prakken said. However, December's report was a sign that the year-long recession has started to take a toll on small and medium-sized employers, according to Prakken. "Today's employment declines clearly indicate that the recession has widened to include businesses of all sizes," he said.
The monthly employment report is accumulated by a confidential survey of 500,000 U.S. businesses that represent approximately 24 million employees. The service sector was particularly hard hit, as the report claims it lost an estimated 473,000 jobs.
ADP's report was released a day before the Labor Department announced that the national unemployment rate rose to 7.2 percent in December, the highest it has been in the last fifteen years.