A massive government stimulus package and states’ moves to reopen businesses closed to stop the coronavirus have contributed to a better-than-expected ADP employment report. AFP Photo
WASHINGTON: Private companies shed another 2.76 million jobs in May following nearly 20 million job losses in April due to the coronavirus pandemic, according to data released Wednesday from payrolls firm ADP.
The losses were widespread throughout all sectors and sizes of business, though education posted a rare, modest increase in employment, according to the data, which are seen as a preview of the government’s key monthly jobs report due out Friday.
“The impact of the COVID-19 crisis continues to weigh on businesses of all sizes,” Ahu Yildirmaz, co-head of the ADP Research Institute, said in a statement.
“While the labor market is still reeling from the effects of the pandemic, job loss likely peaked in April, as many states have begun a phased reopening of businesses.”
The dominant US services sector alone lost just under two million jobs in the month, while manufacturing lost 719,000, according to the report.
The losses were however well below the nine million expected by economists, who have been predicting a rebound in employment thanks to states’ moves to reopen and a massive government rescue package that has allowed some companies to retain or rehire workers.
The report “suggests that the re-hiring of people in states beginning to reopen was very substantial,” said Ian Shepherdson of Pantheon Macroeconomics.
While ADP is far from an infallible predictor of the Friday Department of Labor report, he said it is probably safe to “assume that Friday’s official payroll numbers will be much less bad than the current consensus.”
He predicted another decline of 8 million jobs, and “June payrolls likely will increase substantially.” – AFP