US Labor Market Appears to Stabilize as Private Payrolls Fall Less Than Expected
WASHINGTON—U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as ..
WASHINGTON—U.S. private payrolls fell less than expected in May, suggesting layoffs were abating as businesses reopen, though the overall economys recovery from the COVID-19 pandemic will be slow.
The ADP National Employment Report on June 3 showed private employers laid off another 2.76 million workers last month after a record 19.557 million in April. Economists polled by Reuters had forecast private payrolls dropping by 9 million in May.
A staggering 25 million private jobs were lost over the past three months. The ADP report is jointly developed with Moodys Analytics.
“The COVID-19 recession is over, barring a second wave of infections or policy error,” Mark Zandi, Moodys Analytics chief economist told reporters. “But recovery will be a slog until there is a vaccine.”
A worker sanitizes slot machines in a high-limit room for slots at Bellagio Resort & Casino as the Las Vegas Strip property, which has been closed since March 17 in response to the CCP virus pandemic, prepares to reopen in Las Vegas, Nev., on June 1, 2020. (Ethan Miller/Getty Images)Zandi said there was no evidence yet the governments Paycheck Protection Program (PPP) was helping the labor market. The PPP, part of a historic fiscal package worth nearly $3 trillion, offers businesses loans that can be partially forgiven if they are used for employee pay.
Stocks on Wall Street opened higher as investors remained optimistic about an economic rebound despite growing social unrest. The dollar slipped against a basket of currencies. U.S. Treasury prices fell.
Though the worst of job losses is probably behind, economists estimate that roughly one in four workers who were laid off or furloughed during the near shutdown of the country in mid-March to control the spread of COVID-19 were unlikely to be rehired. Many bankruptcies are anticipated.
The ADP report was released ahead of the governments more comprehensive employment report for May scheduled for release on Friday. Though it has a poor record predicting the private payrolls component of the governments employment report because of methodology differences, it mirrors other labor market indicators in suggesting that layoffs are ebbing.
“The ADP report isnt always a reliable predictor of the government data, but it suggests that the pace of job loss moderated noticeably between April and May, even though it remained substantial relative to pre-COVID-19 norms,” said Daniel Silver, an economist at JPMorgan in New York.
