U.S. businesses cut 27,000 jobs in March, before virus hit

U.S. businesses cut 27,000 jobs in March, before virus hit
Share

U.S. companies shed 27,000 jobs in March, according to a private survey, a figure that mostly reflected the economy as it stood before the full impact of the viral outbreak.

Payroll processor ADP said small businesses took the biggest hit, losing 90,000 jobs, while medium-sized and large companies still added workers. Economists forecast that much larger job losses, probably in the millions, will be reported in the coming months.

March’s figures are the first monthly job loss reported by ADP since Hurricanes Harvey and Irma slammed Texas and much of the southeast in September 2017. Just one month ago, ADP said that businesses gained a solid 179,000 jobs in February.

On Friday, the government will issue its monthly jobs report, which is expected to show a loss of about 150,000 jobs, according to FactSet. That will snap a record-long streak of 113 straight months of hiring.

Mark Zandi, chief economist at Moody’s Analytics, which compiles the ADP report, said that the government’s April jobs report, which will be released in early May, will probably show unprecedented job losses of roughly 10 million to 15 million, with the unemployment rate likely topping 10%.

In addition to widespread layoffs, hiring has collapsed, which will also drag down the overall job numbers. A Moody’s survey of companies that typically finds 40% of firms hiring has fallen to a record low of just 6% of businesses adding jobs, Zandi said.

“Not only are we seeing big layoffs but obviously no one’s hiring at this point,” he said.

ADP said that the figures reflect job counts during the week ending March 14, when the number of people seeking unemployment benefits was still largely in check.

The following week, unemployment claims exploded, soaring to 3.3 million, five times the previous record high.

Most of the job losses in the March ADP report were concentrated in a category that includes retail, which cut 37,000 jobs, and in construction, which shed 16,000. Hotels, restaurants and casinos lost 11,000 jobs.

Healthcare providers were still hiring, adding 44,000 jobs.

Source: AP

Submit a Comment