ADP the Latest Sign of Job Market Woes

The latest ADP employment report, which showed that the private sector shed more than a half million jobs in January, became the latest economic report to add to the already bleak jobs picture for the U.S.

Automatic Data Processing (ADP Quote) said its employment index showed that 522,000 jobs were surrendered by the U.S. private sector last month, indicating that the next government report on nonfarm payrolls, due Friday, could likely be the third-straight report to show more than 500,000 losses.

ADP, which is touts itself as the top source for the widest range of human resources information, payroll processing, and tax and benefits administration, compiles anonymous payroll data for its report but does not include government jobs data.

The report is not considered the most reliable predictor of the Labor Department's employment report. Last month, ADP said its December index showed that private-sector employment fell by 693,000. Although that figure was revised Wednesday to 659,000, it is still well above the government's December total of 524,000 job losses.

Ian Shepherdson, chief economist High Frequency Economics, said that the ADP figure for December was so much weaker than the official payroll data that he expected a correction back to a loss of 400,000 jobs in January.