20 Million Job Losses From ADP May Still Be Understated
It was no secret that April was the worst month of our lives for the American jobs market. ADP’s report on private sector employment showed that payrolls fell by an unprecedented 20,236,000 in the month. ADP’s National Employment Report is used as a barometer for each U.S. Department of Labor report issued on the Friday of the same week.
While the Wall Street Journal’s consensus estimate was −22 million, the Econoday consensus estimate was 20 million jobs lost in April. The March total of jobs added was revised down from −27,000 to −149,000.
Due to the timing of the reporting periods, this ghastly ADP report might not even capture the true carnage in the combined weekly reports that were seen later in April.
Of the 20,236,000 total jobs lost, small businesses had 6.005 million. Medium-sized businesses accounted for 5.269 million losses, and large businesses 8.963 million.
Goods-producing businesses were down 4.229 million jobs. Construction led the way with −2.477 million, and manufacturing showed 1.674 million jobs lost.
The services sector accounted for −16,007 million jobs in April. Leisure and hospitality was at −8.607 jobs, followed by −3.44 million payrolls in trade, transportation and utilities.
Most categories saw losses within the services sector, which is information, financial activities, professional and business services, education and health, and the “other services” categories combined.
As this report uses data through the 12th of the month, the April National Employment Report does not reflect the full impact that COVID-19 had on the jobs market and for the overall employment situation. The matched sample used to develop the ADP National Employment Report comes directly from ADP’s payroll data, which represents 460,000 U.S. clients that employ nearly 26 million U.S. workers
Ahu Yildirmaz, co-head of the ADP Research Institute, said:
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. 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. This is the same time period the Bureau of Labor and Statistics uses for their survey.
The Econoday consensus estimate for this Friday’s Employment Situation report from the Labor Department is −21.25 million. Dow Jones is calling for 21.5 million jobs lost. The unemployment rate is expected to rise to at least 16% for April alone.