ADP Report Shows Another Month of Large Job Losses
Another sobbering report on jobs in the U.S. was released Wednesday by ADP. If the pattern holds, the Labor Department will be reporting Friday that job losses in 2009 picked up right where they left off in 2008.
Businesses in the U.S. cut 522,000 jobs in January, according to a report released Wednesday by payroll processor ADP.
The ADP report, issued two days in advance of the official Labor Department employment situation report, covers only private businesses in the U.S.
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Analysts and economists polled by Bloomberg and MarketWatch had predicted an average of 540,000 jobs lost in the ADP report. ADP revised its December report to reflect 659,000 jobs lost in the final month of 2008.
ADP revised its methodology late last year to help limit differences between its calculations and the government’s payrolls numbers. Economists are now predicting that the Labor Department report on Friday will show that a total of 525,000 non-farm jobs were lost in January and the unemployment rate will be revised up to 7.5 percent from the current 7.2 percent. In December, Labor said that 632,000 jobs were lost.
Friday’s report is expected to show the fifth straight month of jobs losses of over 400,000. The economy shed a total of 2.6 million jobs in 2008, the most since 1945.
The unemployment rate is the most important economic predictor of collection and recovery rates for accounts receivable management firms. In insideARM’s Credit & Debt Collection Confidence Survey for the fourth quarter of 2008, collection agency respondents ranked unemployment as the most significant factor on recovery rates, with more than 35 percent of participants saying it has a “Major impact” on collections.
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Comment from tommytoons on February 4, 2009 at 12:35PM EST
New tactics need to put on the board for collections with more and more people out of work, New methods of helping folks pay bills need to looked into. The days of just sending them to court is coming to a close.
A friendier face to Collection Companies need to become the model with so many out of work. As my mother used to say, you draw more flies to honey than to vinegar. This needs to be the new way to do our business in the Collections industry.
Comment from Scott S. on February 6, 2009 at 11:24AM EST
It seems to me that something else draws a lot of flies - the pastures are full of it and so is that commentary. Before accounts get listed with collection agencies, debtors get plenty of opportunities to pay "friendlier faces" as you put it. They get the friendly reminders, the nice calls from the in-house collectors, etc. If "honey" was going to get them to pay they'd have paid the client and you wouldn't have gotten the placement. I am not in any way condoning illegal or rogue behavior by the small percentage of collectors out there who show wanton disregard for the FDCPA and simply terrorize debtors into paying (or in many cases complaining andor suing)...but let's not confuse what we do with customer service, because that's a quick ticket to all of us joining them in the unemployment lines.