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America’s nonfarm private sector shed tens of thousands of jobs from February to March, breaking a two-and-a-half-year growth trend and supporting economists’ view that America’s longest employment boom in history is likely over.
The ADP National Employment Report, published on Wednesday, showed that overall private payrolls fell by 27,000 jobs last month, the first decline since September 2017, after advancing by an unrevised 183,000 in February.
Small businesses accounted for all the job losses, while large enterprises added some, with the net amount falling into negative territory.
“It’s been 10 straight years of consistent, solid job growth, and the virus has put an end to that,” Mark Zandi, chief economist at Moody’s, said on a media conference call, as cited by CNBC.
“Much bigger job losses are coming,” he added, predicting that total job losses will total between 10 million and 15 million.
Economists polled by Reuters had forecast private payrolls falling by 150,000 jobs in March. The smaller-than-expected decline was because establishments were surveyed in mid-March, before many states and local governments ordered residents to stay at home unless on essential business. Restaurants, bars, and other social-gathering venues also were shuttered to slow the spread of COVID-19, the respiratory illness caused by the CCP virus.
The small business sector, defined as 49 employees or fewer, shed 90,000 jobs, the report showed.
Large companies—those with 500 or more employees—added 56,000 jobs.
Midsized businesses, which employ between 50 and 499 staff, added 7,000 positions.
A further breakdown showed that businesses that employ fewer than 19 people—defined as very small—slashed 66,000 jobs, while those between 20-49 employees cut 24,000.
“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 Bureau of Labor and Statistics 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.”
The ADP report was published ahead of the benchmark nonfarm payrolls report scheduled for release on Friday by the Bureau of Labor Statistics (BLS). The most recent BLS report, released on March 6, showed that total nonfarm payroll employment rose by 273,000 in February, with a jobless rate of 3.5 percent.
Estimates around Friday’s government jobs figures vary widely.
Economists polled by The Wall Street Journal are expecting Friday’s government report to show a loss of 10,000 jobs in March and an unemployment rate of 3.7 percent. A Reuters survey of economists indicates the BLS report on Friday is likely to show private payrolls declined by 163,000 jobs in March, while a MarketWatch poll predicted 25,000 job cuts.
Economists widely believe the longest employment boom in U.S. history, which started October 2010, came to an end in March as the epidemic surged.
Other economic data released Wednesday fed into the grim view on the U.S. economy. Figures published by the Institute for Supply Management (ISM) showed the index of national factory activity fell to a reading of 49.1 last month from 50.1 in February. A reading below 50 indicates contraction in the manufacturing sector, which accounts for 11 percent of the U.S. economy.
Timothy Fiore, Chair of the Institute for Supply Management Manufacturing Business Survey Committee, said “comments from the panel were negative regarding the near-term outlook, with sentiment clearly impacted by the coronavirus (COVID-19) pandemic and energy market volatility.”
“The PMI returned to contraction territory, and with a negative trajectory,” he added.
More than 4,000 people have died from COVID-19 in the United States while over 190,740 cases have been confirmed, according to the latest data collated by Johns Hopkins University, which is tracking the global pandemic.
President Donald Trump said at a White House briefing Tuesday that it is “a matter of life and death” for Americans to heed his administration’s social distancing and other guidelines, and predicted the country would soon see a “light at the end of the tunnel” in the fight against the outbreak.
“I want every American to be prepared for the hard days that lie ahead,” Trump said.
Reuters contributed to this report.
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