In a preview of what’s coming on Friday with the April payrolls report, ADP said US firms cut 20.236 million jobs last month.
That was slightly “better” than expected – consensus was looking for a decline of 20.55 million. It goes without saying that this print is one for the history books.
Last month, ADP cautioned that the figures for March (which initially showed a net loss of 27,000 jobs) utilized data through the 12th of the month, which meant they didn’t reflect the impact of COVID-19 on the employment situation. March’s figure was revised sharply lower to -149,000. But it doesn’t even register (visually speaking) on a chart alongside April’s historic debacle.
Even as the March report didn’t capture the brunt of lockdown effect, the survey period did manage to pick up early signs of the coming storm. Small businesses shed 90,000 positions in March, a preview of the devastation Main Street would suffer over the ensuing weeks. As I wrote at the time, “if there’s one key takeaway from the March report, it’s that small, vulnerable companies were rapidly laying off workers even before the lockdown measures proliferated in earnest”.
Fast forward a month, and businesses with between 1 and 499 employees shed 11.3 million positions from March to April. That was around 2.3 million more than large employers.
Needless to say, the services sector was simply decimated. Of the total jobs lost over the survey period, more than 16 million came from the service-providing sector.
The breakdown shows Leisure & Hospitality crushed. Again, that’s not surprising, but as I’m always keen to remind readers, these are people, not numbers.
“Job losses of this scale are unprecedented. The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession”, Ahu Yildirmaz, co-head of the ADP Research Institute lamented on Wednesday.
“Additionally, it is important to note that the report is based on the total number of payroll records for employees who were active on a company’s payroll through the 12th of the month”, Yildirmaz added.
The point: It’s actually worse than these numbers reveal. And ADP makes that explicit. “The April NER does not reflect the full impact of COVID-19 on the overall employment situation”, the accompanying press release reads.
Of course, for some 70,000 Americans, COVID-19 cost them more than their jobs.
