Six-Month Bankruptcy Filings Up 30 Percent, Private Sector Employment Declines
ALEXANDRIA, Va., and ROSELAND, N.J. — U.S. consumer bankruptcy filings jumped 30 percent nationwide during the first six months of 2008 from the same period a year ago, according to the American Bankruptcy Institute, which relies on data from the National Bankruptcy Research Center.
Moreover, the June consumer filing total of 82,770 was 20.7 percent more than the 68,559 consumer filings recorded in June 2007.
While the June total represented an increase over the previous year, it was a 9.3-percent decrease from the May 2008 total of 91,214 consumer filings.
Chapter 13 filings accounted for 32.6 percent of all consumer cases in June, a slight increase from May.
"The overall trend of rising bankruptcies reflects the growing financial strain of felt by U.S. households, burdened by high debt, rising mortgage costs and falling home values," said Samuel Gerdano, ABI's executive director.
Private Sector Employment Down almost 80,000 in June
In another June trend, private sector employment decreased 79,000, according to Wednesday's ADP National Employment Report.
The ADP National Employment Report, created by ADP Employer Services, a division of Automatic Data Processing, in partnership with Macroeconomic Advisers LLC, is based on actual payroll data and measures the change in total non-farm private employment each month.
Non-farm Private Employment Highlights
Total employment: -79,000
Small businesses:* +7,000
Medium businesses:** -35,000
Large businesses:*** -51,000
Goods-producing sector: -76,000
Service-providing sector: -3,000
Manufacturing industry: -44,000
* Small businesses represent payrolls with one-49 employees
** Medium businesses represent payrolls with 50-499 employees
*** Large businesses represent payrolls with more than 499 employees
According to Joel Prakken, Chairman of Macroeconomic Advisers LLC, "Nonfarm private employment decreased 79,000 from May to June 2008 on a seasonally adjusted basis, according to the ADP National Employment Report. The estimated change in employment from April to May was revised down from an increase of 40,000 to an increase of 25,000. This month's decrease in employment was broad-based across industrial sectors and suggests continued weakness in employment."
He went on to note that employment in the service-providing sector of the economy declined 3,000, which is the first decline since November 2002.
Additionally, employment in the goods-producing sector declined 76,000, with manufacturing employment falling 44,000, marking the 19th and 22nd consecutive monthly declines, respectively, he reported.
Prakken explained, "Two sectors of the economy hit hardest by recent problems in mortgage markets have been residential construction and financial activities related to home sales and mortgage lending. Today's report suggests no lessening of the recent strain on employment in these industries.
"In June, construction employment dropped 34,000. This was the 19th consecutive monthly decline and brings the total decline in construction jobs since the peak in August of 2006 to 349,000. In addition, employment in financial activities declined 3,000 during the month," he highlighted.
The matched sample used to develop the ADP National Employment Report was derived from ADP data which, during the first six months of 2008, averaged approximately 399,000 payrolls representing nearly 24 million U.S. employees. This approximately represents the size of the matched sample used this month.
Small Business Highlights
Total small business employment: +7,000
Goods-producing sector: -27,000 small business jobs
Service-providing sector: +34,000 small business jobs
Private employment among small businesses increased by 7,000 in June, according to the ADP Small Business Report released Wednesday.
"Employment among small-size businesses, defined as those with fewer than 50 workers, advanced just 7,000 during June, the weakest monthly increase since November 2002. Nevertheless, this month's weaker employment growth among small-size businesses still contrasts with growing employment declines among larger firms, and is consistent with the comparative resiliency small-size businesses have demonstrated over the past several years," said Prakken.