Numbers: Private sector companies lost 20.2 million jobs in April as many were forced to close during a nationwide shutdown to slow the coronavirus, highlighting the greatest crisis for American workers and the market. American work in almost a century.
What happened: Small employers – those with between one and 49 workers – cut 6 million jobs in April, according to data from Automatic Data Processing Inc.
And large companies with 500 or more employees have cut 8.9 million jobs.
Service-producing industries reduced 16 million jobs in April, led by an 8.6 million drop in hotels and restaurants. Retail trade and transport also lost 3.4 million positions.
Healthcare companies have also cut jobs by almost a million. The pandemic has caused a sharp drop in treatments and appointments for non-coronavirus patients across the country.
Goods-producing firms laid off 4.2 million workers, with 2.5 million job losses in construction and 1.7 million in manufacturing.
The payroll processor report is produced in collaboration with Moody’s Analytics.
Lily: US trade deficit climbs 12% i as coronavirus hits exporters and tourism
Big picture: The staggering loss of jobs in the ADP report suggests what should be an equally huge drop in the government’s official job report, released Friday morning.
The unemployment rate has probably reached the highest level ever recorded – the MarketWatch forecast is 15% – against 3.5% just two months ago.
On the contrary, the ADP report may have underestimated the number of jobs lost. The survey counts people as employees as long as they are on the payroll, even if their hours have been reduced to zero. ADP does not include government jobs.
More than 30 million people have applied for unemployment benefits in the past six weeks, although not all are still unemployed. Another three million people have probably filed in the past week.
Lily: 30 million Americans and more have lost their jobs because of the coronavirus
As well:Unemployment checks still not mailed to millions of unemployed
In all likelihood, the total job losses likely exceed the 23 million new jobs created since the end of the last recession in 2009 until the pandemic in mid-March.
In any case, the job market has suffered a huge blow which will make the recovery of the economy more difficult once the COVID-19 pandemic begins to subside.
Washington has stepped in with massive subsidies to encourage companies to keep workers on payroll until the economy reopens, but even that may not be enough. What used to be considered temporary job losses is becoming more and more permanent.
Lily: Why the recovery of the US economy after the coronavirus is likely to be long and painful
What ADP said: “The job losses of this magnitude are unprecedented. The total number of job losses in the month of April alone was more than double the total number of jobs lost during the Great Recession, “said Ahu Yildirmaz, co-director of the ADP Research Institute.
Lily:Millions of layoffs to push unemployment to highest level since the Great Depression
Market reaction:Dow Jones industrial average
and S&P 500
were expected to open higher in trading on Wednesday in the hope that many states trying to reopen their economies will succeed.