This morning, Automatic Data Processing (ADP), the biggest payroll processing firm, estimated that the economy lost 203,000 private sector jobs in October. That was more than the consensus estimate of 190,000 jobs lost. However, the September job loss numbers were revised to a loss of just 227,000 from the original read of 254,000. Thus the losses are coming from a higher base level, and if the revisions are included, this report was in line with consensus or perhaps a bit better.

Still, it indicates that while the economy might be expanding, employment isn't. However, this is the seventh straight month where ADP has seen fewer jobs lost than the month before. This is similar to the pattern that we saw following the last two recessions.

While employment has always been considered a lagging indicator, it has been becoming more so with each passing decade. In part this reflects the changing nature of the workplace, with manufacturing jobs making up a much smaller part of the total.

Also, this time around an unusually high percentage of the job cuts are of the permanent variety (see "Permanent vs. Temporary Layoffs"). The graph below, originally from the Atlanta Fed, was also used in that post. The job loss numbers are a net number, with new jobs created offsetting other job losses.? The rate of layoffs has slowed down, but the rate of job creation has not yet picked up (see "It's the Lack of Job Creation, Stupid!").

By sector, ADP saw 86,000 jobs lost in the service sector, which is far larger, but more stable than the goods producing sector. The service sector losses included 18,000 from financial services -- the 23rd straight month of declines there. The goods producing sector lost 117,000 jobs, including 65,000 in manufacturing and 51,000 in construction.

The read on manufacturing is in direct contrast with the ISM manufacturing survey which came out on Monday and indicated that manufacturing was actually gaining jobs in October. We will see on Friday which one was right when the Bureau of Labor Statistics? (BLS) comes out with the official employment numbers. The consensus for the BLS (which includes government jobs, while ADP does not) report is for a decline of 175,000 jobs. The ADP report might make people a little bit more inclined to take the over on that number, but I don't think by a lot.

By firm size, it looks like large firms, which tend to have better access to financing, are faring better than their little brothers.