U.S. Private Sector Job Losses Show Substantial Slowdown In May
June 03 2020 - 5:06AM
RTTF2
After reporting a record drop in private sector employment in
the previous month, payroll processor ADP released a report on
Wednesday showing the pace of job losses slowed by much more than
anticipated in the month of May.
ADP said private sector employment slumped by 2.76 million jobs
in May after plummeting by a revised 19.557 million jobs in
April.
Economists had expected employment to plunge by about 9.0
million jobs compared to 20.236 million job nosedive originally
reported for the previous month.
"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," said Ahu Yildirmaz,
co-head of the ADP Research Institute.
The report said employment in the service-providing sector
tumbled by 1.967 million jobs, reflecting a particularly steep drop
in jobs in the trade/transportation/utilities industry.
Employment in the goods-producing sector also sank by 794,000,
as employment in the manufacturing industry slumped by 719,000
jobs.
ADP also said employment at large businesses plummeted by 1.604
million, while employment and midsized and small businesses
decrease by 722,000 jobs and 435,000 jobs, respectively.
On Friday, the Labor Department is scheduled to release its more
closely watched employment report for May, which includes both
public and private sector jobs.
Employment is expected to tumble by about 8.0 million jobs in
May after plunging by 20.5 million jobs in April. The unemployment
rate is expected to jump to 19.7 percent from 14.7 percent.
Noting the ADP data has not provided an accurate guide to the
Labor Department figures in the past, Michael Pearce, Senior U.S.
Economist at Capital Economics, said he will wait for the official
report before drawing any firm conclusions.
"But this report does add weight to the message from the recent
decline in continuing jobless claims, indicating that rehiring
could be beginning to outpace the continued flood of new layoffs,"
Pearce said.
He added, "As more states move to reopen, we expect that trend
to continue, with employment rebounding potentially quite sharply
from June onwards."
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