COVID-19 continues to take its toll on the nation’s workforce as the number of private-sector jobs fell by a record 20.2 million from March to April, including more than 11 million jobs from small- and medium-sized businesses, according to the April ADP National Employment Report.
“Job losses of this scale are unprecedented,” said Ahu Yildirmaz, co-head of the ADP Research Institute, in a statement. “The total number of job losses for the month of April alone was more than double the total jobs lost during the Great Recession.”
At 16 million jobs lost, the service industry took the biggest hit, as workers from healthcare, education, hospitality losses, trade, transportation, information, financial activities and professional and business sectors received pink slips.
Small businesses, which ADP defined as between one and 49 employees, saw six million jobs disappear. Medium shops between 50 and 499 employees saw losses totaling 5.2 million, while big businesses with 500 to more than 1,000 employees suffered nearly nine million jobs lost.
While the reported job losses are the worst since ADP launched the survey 18 years ago, it was not as bad as the 22 million that economists surveyed by Dow Jones were expecting. The previous record was 834,665 in February 2009 amid the financial crisis and the Great Recession, ADP said.
The dramatic number of job losses follows the $2.2 trillion CARES Act stimulus package, which was designed in part to help businesses survive the coronavirus. The original package included $350 billion for the Small Business Association’ Payroll Protection Program (PPP), which provides forgivable loans if most of the money is spent on payroll. When those funds were exhausted in less than two weeks, President Donald Trump and Congress approved another $310 billion for the program.
Minutes before the ADP report was released on Wednesday (May 6), St. Louis Federal Reserve President James Bullard was asked by CNBC about the U.S. Labor Department’s jobless numbers survey, which will be released on Friday (May 8).
“It’s not surprising,” Bullard said on “Squawk on the Street.” “It’s a pandemic, it’s a shutdown situation. We need to get the pandemic under control. Then, of course, you have to help these workers.”
PYMNTS research found that more SMBs are turning to federal PPP loans to stabilize their businesses in the face of economic uncertainty. Nearly 45 percent of SMB owners who applied for the bailouts said they did so to keep workers on the payroll and reopen their businesses; 25 percent said they needed the additional funding to survive the pandemic; while another 25 percent sought the added cash for reserves.
The ADP survey, in collaboration with Moody’s Analytics Inc., is a monthly measure of the change in total U.S. nonfarm private employment based on actual, anonymous payroll data of ADP client companies.