US companies cut 20.2M jobs in April as coronavirus drives massive layoffs
The data is typically a good indicator of what to expect during the Labor Department's more closely watched jobs report
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Private employers slashed 20.2 million jobs in April as the coronavirus-induced lockdown ravaged the U.S. economy, according to the ADP National Employment Report released Wednesday.
Economists surveyed by Refinitiv expected a record 20.05 million job losses in the private sector. It was the largest decline on record since the survey started in 2002. The previous record was 834,665 in February 2009 in the midst of the Great Recession.
“Job losses of this scale are unprecedented," said Ahu Yildirmaz, co-head of the ADP Research Institute. "The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession."
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The report likely still understates the actual damage inflicted by the stay-at-home measures, because the ADP study is only based on data collected through April 12.
Since the virus outbreak gained a foothold in the U.S. about two months ago, forcing a majority of states to shutter nonessential businesses and direct residents to stay at home, 30 million Americans have filed for first-time jobless benefits.
Job losses were concentrated heavily in the leisure and hospitality industry, as bars and restaurants were forced to close. In total, the sector saw 8.6 million job losses, even as businesses tried to compensate with delivery and takeout options.
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Trade, transportation and utilities was the next hardest-hit sector, posting a 3.44 million decline. Construction alone slashed 2.48 million. Other big losses took place in manufacturing (1.67 million), professional and business services (1.16 million), administrative and support services (1.12 million) and health care and social assistance (1 million).
Just two industries added jobs last month. Education saw a 28,000 increase, and management of companies and enterprises grew by 6,000.
March's initial number of 27,000 was revised lower to 149,000.
Unemployment at this scale hasn’t been recorded since the Great Depression, when the jobless rate peaked at 25 percent.
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The data is often a good indicator of what to expect in the more closely watched jobs report from the Labor Department on Friday, which is predicted to show the U.S. economy lost a record-shattering 21.85 million jobs last month, essentially erasing the past decade of job gains. Analysts anticipate unemployment will skyrocket to 16 percent from March's 4 percent.
"These numbers are very, very chilling," Kevin Hassett, a White House economic adviser, told FOX Business on Wednesday. "This is the biggest shock that our economy has ever seen...but it's something that we've done in order to get ahead of the curve on the disease. So it's something that can be reversed, hopefully relatively quickly."