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 on Wednesday 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.
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 polled by Reuters 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.
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.
The ADP report was published ahead of the government's more comprehensive employment report for April scheduled for release on Friday. While it has a poor record predicting the private payrolls component of the government's employment report because of methodology differences, economists said it offered some clues on the size of anticipated job losses in April.
The ADP noted that its April report "does not reflect the full impact of COVID-19 on the overall employment situation."
According to a Reuters survey of economists, nonfarm payrolls are forecast to have tumbled by a historic 21.853 million in April, which would blow away the record 800,000 dive seen during the Great Recession. Employment dropped by 701,000 jobs in March, ending a record streak of gains dating to September 2010.
The unemployment rate is seen jumping to 16% in April, which would shatter the post-World War Two record of 10.8% touched in November 1982. In March the jobless rate shot up 0.9 percentage point, the largest monthly change since January 1975, to 4.4%.
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