The numbers: Private-sector companies shed a whopping 20.2 million jobs in April as many were forced to shutter during a nationwide shutdown to slow the coronavirus, underscoring the biggest crisis for American workers and the U.S. labor market in nearly a century.
What happened: Small employers — those with one to 49 workers — culled 6 million jobs in April, according to data from Automatic Data Processing Inc.
Mid-sized enterprises with 50 to 499 employees shed 5.3 million jobs.
A nearly empty New York City subway system. The coronavirus has shut down large parts of the economy and caused untold suffering.
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And large businesses with 500 employees or more axed 8.9 million jobs.
Service-producing industries slashed 16 million jobs in April, led by a 8.6 million decline at hotels and restaurants. Retail and transportation also lost 3.4 million positions.
Companies that produce goods laid off 4.2 million workers, with 2.5 million job losses in construction and 1.7 million in manufacturing.
The payroll processor’s report is produced in collaboration with Moody’s Analytics.
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Big picture: The stunning loss of jobs in the ADP report foreshadows what’s expected to be a similarly huge decline in the government’s official employment report that comes out Friday morning.
The unemployment rate has likely surged to the highest level on record — the MarketWatch forecast is 15% — from a mere 3.5% just two months ago.
If anything, the ADP report might have undercounted the number of lost jobs. The survey counts individuals as employed 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 jobless benefits in the past six weeks, though not all of them are still unemployed. Another 3 million probably applied in the past week.
Read: 30 million Americans and counting have lost their jobs to the coronavirus
Also:The unemployment checks still aren’t in the mail for millions of jobless workers
In all likelihood, total job losses probably exceed the 23 million new jobs created from the end of the last recession in 2009 until the pandemic struck in mid-March.
Whatever the case, the labor market has suffered an enormous blow that will make it harder for the economy to recovery once the COVID-19 pandemic begins to fade.
Washington has stepped in with massive subsidies to encourage companies to keep workers on payrolls until the economy reopens, but even that might not be enough. What were viewed as temporary job losses are increasingly becoming permanent.
Read: Why the U.S. economy’s recovery from the coronavirus is likely to be long and painful
What ADP 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,” said Ahu Yildirmaz, co-head of the ADP Research Institute.
Read:Millions of layoffs to push unemployment to highest level since Great Depression
Market reaction:The Dow Jones Industrial Average DJIA, +0.56% and S&P 500 SPX, +0.90% were set to open higher in Wednesday trades on continued hopes that many states trying to reopen their economies will succeed.
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