Private sector employment shed 20,236,000 between March and April according to the April ADP National Employment Report. The report measures jobs lost between March 12 and April 12, the same period used by the Bureau of Labor and Statistics. Actual job losses during this period were much higher, and the NER measures private sector employment only.
- April saw double the number of layoffs than the entire Great Recession which spanned three years.
- Ahu Yildirmaz of the ADP Research Institute stressed that “jobs losses of this scale are unprecedented.”
- The vast majority of losses were in the service sector which shed 16 million jobs.
April saw record job losses in the US. In the 30-day period measured by the NER, the private sector alone lost more than twice the amount of jobs lost during the entirety of the Great Recession. Actual job losses were much higher, as the NER measures private sector employment only.
Large businesses lost 8.9 million jobs. 1.3 million of those were in companies between 500-999 employees, while the majority were in companies with 1,000 employees or more. Medium businesses lost 5.2 million jobs, and small businesses lost 6 million. As small businesses are measured at 1 – 49 employees, the loss of 6 million jobs in the sector is a proportionately massive blow to small businesses in the US.
— Darius Vaskelis (@vaskelis) May 6, 2020
By sector, goods-producing companies lost 4.2 million jobs. Most of these were in construction, which shed 2.4 million, followed by manufacturing with 1.6 million losses and the natural resources and mining industry with 78,000 losses. Franchise businesses lost over 1 million jobs.
The service industry bore the brunt of the losses, with 16 million layoffs. The biggest losses were seen in leisure and hospitality with 8.6 million jobs lost. Trade, transportation, and utilities lost 3.4 million jobs. Professional and business services lost 1.1 million, as did administration and support services.
"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. "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."
The coronavirus pandemic has led to the shutdown of huge portions of the US economy, triggering a record-breaking collapse of the once-flourishing labor market. A recession is now underway in the US, which is now the global epicentre for the coronavirus pandemic. More job losses are expected in the coming months, and while this recession may take years to recover from rather than decades, the short-term outlook indicates difficult times ahead for many Americans as the effects of the pandemic continue to impact millions of lives.
Gold has been battling resistance at the $1,700 mark following the release of the ADP employment report. Spot gold last traded at $1,696.22/oz, up 0.44% with a high of $1,711.53/oz and a low of $1,695.46/oz. While the job losses are enormous, they are also in line with recent unemployment claims, and as such, arguably priced in to today’s market movements.
It’s unlikely that a major price movement will be triggered due to this particular news story. However, the losses highlight the pressure being placed on the US economy and the US dollar, and could be seen as long-term bullish for gold.