Summary: Private sector employment crushed in April; official payroll report to tank at end of week; employment numbers trashed across firms of all sizes; services sector accounts for 80% of losses.
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. Unlike the March report, this latest report includes a month in which the full effects of US infection controls have been felt.
April’s report indicated private sector employment fell by 20,236,070. The fall was largely in line with the 20 million drop which had been expected.
“Non-farm payrolls on Friday are expected to show job losses of 21.3 million with unemployment expected to have risen to 16% from 4.4% in March,” said ANZ economist John Bromhead.
US Treasury yields rose across the curve, possibly implying the disastrous numbers had already been factored in. However, news of the US Treasury’s intentions to issue more long-term bonds also sent yields higher. By the end of the day, the 2-year Treasury bond yield had inched up 1bp to 0.18%, the 10-year yield had gained 4bps to 0.70% while the 30-year yield finished 7bps higher at 1.40%.
Employment numbers were trashed across the board, regardless of size. Firms with less than 50 employees lost a net 6.005 million positions, mid-sized firms (50-499 employees) shed 5.269 million positions and large businesses (500 or more employees) accounted for 8.963 million fewer positions.