Summary: Private sector job losses slow in May; still awful but much less than expected; employment numbers hit hardest at large firms; services sector accounts for 70% of losses; official ADP payroll report likely to follow suit at end of week.
The ADP National Employment Report is a monthly report which provides an estimate of US non-farm employment in the private sector. Since the report began to be published in 2006, its employment figures have exhibited a high correlation with official non-farm payroll figures, although a large difference can arise in any individual month. As with April’s report, this latest report highlights the extent to which the US economy is suffering.
The ADP May report indicated private sector employment fell by 2.76 million, much less than the 8 million which had been expected. April’s loss was marginally revised down from 20.2 million to 19.557 million.
“This could point to a shallower-than-anticipated downturn in the labour market, but it is quite another challenge for employment to recover from here,” said ANZ economist John Bromhead.
US Treasury yields rose across the curve, although the increases could be viewed as part of a broader “risk-on” theme taking place in US financial markets. By the close of business, the 2-year Treasury bond yield had gained 4bps to 0.20%, the 10-year yield had increased by 6bps to 0.74% while the 30-year yield finished 4bps higher at 1.53%.
Employment numbers were down across businesses of all sizes but employment at large firms suffered most. Firms with less than 50 employees lost a net 0.435 million positions, mid-sized firms (50-499 employees) shed 0.722 million positions while large businesses (500 or more employees) accounted for 1.604 million fewer jobs.