US private employers laid off a record 20.236 million workers in April
WASHINGTON, May 10 (NNN-AGENCIES) — US private employers laid off a record 20.236 million workers in April as mandatory business closures in response to the novel coronavirus outbreak savaged the economy, setting up the overall labor market for historic job losses last month.
The plunge in private payrolls shown in the ADP National Employment Report suggested that national lockdowns to slow the spread of COVID-19, the respiratory illness caused by the virus, could leave lasting scars on the economy, even as large parts of the country reopen non-essential businesses.
“One thing for sure is that this pandemic health crisis has produced depression-magnitude job losses which means this recovery is going to take longer than many are thinking,” said Chris Rupkey, chief economist at MUFG in New York.
“The Great Depression lasted three and a half years, and it will be a miracle if the economy gets anywhere near back to normal within the next couple of years.”
Data for March was revised to show private payrolls decreasing by 149,000 jobs instead of the previously reported 27,000, which was the first decline since September 2017.
Economists had forecast private payrolls tumbling by 20.050 million jobs in April. The ADP report is jointly developed with Moody’s Analytics.
The staggering numbers were widely anticipated, since 30.3 million people had filed claims for unemployment benefits since March 21, equivalent to nearly one out of every five workers losing their job in just over a month.
The economy contracted in the first quarter at the steepest pace since the fourth quarter of 2008. The slumping economy and rising joblessness are big challenges for President Donald Trump, who is seeking a second term in office in November’s election.
Trump has been pushing for businesses to reopen and even supported demonstrations in some parts of the country against the “stay-at-home” orders.
At least 30 states have partially reopened, though health experts and researchers have predicted a surge in infections and deaths.
“The jobs numbers are very, very chilling and I think that it’s very important, you know, to let people understand in a very somber way that 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,” Trump’s economic adviser, Kevin Hassett told Fox Business Network on Wednesday.
Layoffs last month were across small, medium and large enterprises. The leisure and hospitality industry shed 8.6 million jobs in April, accounting for more than 40% of the private sector job losses. Manufacturing lost 1.7 million jobs, while 2.5 million construction workers were laid off.
Stocks on Wall Street were trading higher amid hopes of a pickup in business activity as more states ease restrictions on movements, shifting investors’ attention from the dismal employment numbers.
The dollar rose against a basket of currencies. U.S. government bond prices fell after the Treasury Department sharply increased the size of its long-dated debt auctions. — NNN-AGENCIES
