Wednesday, September 1, 2010

Private Sector Employment Dips

Private sector employment in the US fell for the first time this year in August.

Businesses shed 10,000 workers last month, according to ADP Employer Services. This is the first monthly decline since last December. It adds more evidence to the case that we are headed toward/in a double dip recession.
“The decline in private employment in August confirms a pause in the recovery already evident in other economic data,” ADP said in its report.

The ups and downs in unemployment fell in line with Austrian Business Cycle Theory, where a downturn phase of the business cycle would result in jobs moving away from the capital goods sector toward the consumer goods sector.

Within the capital goods sector, the manufacturing sector experienced 40,000 workers cuts and in the construction industry 33,000 jobs were lost.

The services sector, which can tend toward more consumer goods activity, continued strong, adding 30,000 employees and marking its seventh consecutive monthly increase.

Indications that regulatory interventionism is suffocating small and medium-sized businesses was signalled by job cuts in both groups versus the trend at bigger companies, where there were no net losses. Big companies tend to have a stronger influence over new regulations and can often influence legislation to their advantage and against smaller firms.

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