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The numbers: Private-sector employers eliminated jobs in March as the economy shut down due to the coronavirus outbreak, according to a new report released Wednesday. The report which uses Automatic Data Processing Inc. data in collaboration with Moody’s Analytics, found that 27,000 jobs were lost in the month. This is smaller than forecasts from economists surveyed by Econoday who expected a decline of 180,000.
What happened: Small employers, or those with one to 49 workers, shed 90,000 jobs in March. Mid-sized enterprises (50-499 employees) gained 7,000 jobs and large businesses, meaning those with 500 employees or more, gained 56,000 jobs. Service-producing industries lost 18,000 jobs in March, including in the trade sector. Goods-producing industries shed 9,000 jobs, led by the construction sector.
Big picture: The ADP jobs data could be a useful guide for March nonfarm payroll report, released by the Bureau of Labor Statistics on Friday.
Economists surveyed by MarketWatch are looking for payrolls to fall 25,000 in the BLS survey.
Some economists didn’t expect such a weak report because they said the ADP survey counts individuals as employed as long as they are on the payoll, even if their hours have been reduced to zero. The ADP does not include government jobs.
Economists also expect the unemployment rate will jump to 3.7% in March from 3.5% in the prior month in the Labor Department report due Friday at 8:30 a.m. Eastern Time and this includes government as well as private-sector workers.
What ADP said: “ “It is important to note that the ADP National Employment 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 BLS uses for their survey,” said Ahu Yildirmaz, co-head of the ADP Research Institute. “As such, the March NER does not fully reflect the most recent impact of COVID-19 on the employment situation, including unemployment claims reported on March 26, 2020.”
Market reaction: Stock-index futures YM00, -3.40% pointed to a lower start for stocks Wednesday after President Donald Trump warned a “very, very painful” two weeks lies ahead given the pandemic.
