U.S. private sector cuts 33,000 jobs in August

By Burton Frierson

NEW YORK (Reuters) - U.S. private employers cut 33,000 jobs in August, according to a private report by ADP Employer Services that may not bode well for Friday's monthly payrolls data to be released by the government.

Job cuts by manufacturers outweighed hiring by service sector employers, according to the report.

The ADP report was expected to show a drop of 30,000 private-sector jobs in August, according to the median of estimates from economists surveyed by Reuters. The 29 forecasts ranged widely from a decline of 115,000 to a rise of 15,000.

In July, the private sector added 1,000 jobs, according to revised ADP data released on Thursday. July's figure was originally reported as a rise of 9,000 jobs.

The ADP report comes ahead of the government's more comprehensive labor market report on Friday, which economists expect to show a decline 75,000 jobs in August.

That would make August the eighth consecutive month of job losses for the world's largest economy, which is struggling under the effects of a slowdown induced by the worst housing slump since the Great Depression of the 1930s.

"This is broadly consistent with all other the labor data we've seen this month and last month, said Zach Pandl, economist at Lehman Brothers in New York.

"It confirms a very weak non-farm payroll reading tomorrow. ADP has been overshooting the non-payrolls by about 80,000 over the past six months. We are waiting for the final say from the non-farm payrolls tomorrow."

U.S. stock futures added to their losses after the slightly weaker-than-expected ADP result and dropped to session lows after weekly data from the government showed an unexpected jump in the number of people filing for jobless benefits.

U.S. government bonds, which usually benefit from signs of economic weakness, extended their gains after the report on jobless claims.

The report said manufacturing jobs declined for the 24th straight month, losing 56,000 jobs. Those losses were partially offset by employment gains in the service sector, which added 45,000 jobs.

Large businesses, those with 500 or more workers, cut 28,000 jobs. In medium-size companies, with 50 to 499 workers, employment declined by 25,000.

Employment in small businesses, defined as those with fewer than 50 workers, advanced 20,000 during the month, after posting a gain of 46,000 in July.

(Additional Reporting by Richard Leong; Editing by Tom Hals)