US private sector payrolls see record slump in April
Private sector employment in the US suffered its worst monthly fall on record in April amid the coronavirus outbreak, according to the latest figures from ADP.
Employment slumped by 20,236,000 jobs from March to April, versus expectations of a 20,550,000 decline.
Ahu Yildirmaz, vice president and 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," he said. "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."
Large businesses with 500 employees or more recorded the worst losses, with just under 9 million jobs lost. Small business with fewer than 50 employees saw 6m jobs go, while medium businesses with between 50 and 499 members of staff saw a 5.3m drop.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said the figures were "terrible, but not really news".
"We got this one wrong. ADP’s model usually relies heavily on the idea that about half the people who make a jobless claim in any given month then find a new job the same month. That clearly didn’t happen in April as the entire hospitality sector and much of retailing shut down, so we expected ADP’s model to report a smaller drop in payrolls.
"ADP does not make its full data available, so they may have adjusted their model this month to take account of the sudden stop in the economy, or perhaps the data they collected from firms which use their payroll processing services were so bad that they overwhelmed the rest of the model. Either way, this report just confirms what everyone already knows, namely, that job losses in April were on an unprecedented scale. We expect a 20m drop in Friday’s official number. In May, we think payrolls will drop by a further 12m. In June, though, we expect the rebound to begin in the wake of the re-opening now underway in about half the country."