Here’s some interesting news. The payroll company Automatic Data Processing, Inc. released its May jobs report on Wednesday, and the numbers were much lower than anticipated. According to ADP data, 2.8 million jobs disappeared in May. Dow Jones economists predicted that the company’s report would reflect 8.75 million losses. The Dow Jones Industrial Average rose by 230 points, or 0.9% on the news. ADP estimates that 22.6 million jobs were lost since March, and that the vast majority of those occurred in mid-April. While the economy is still losing jobs, the pace could be slowing.
Mark Zandi, Chief Economist at Moody’s Analytics (which produces the report with ADP), said that unless there is a second wave of the coronavirus, the recession may be behind us. ‘It will be the shortest recession on record, but among the most severe’, Zandi told reporters. The employment situation in May is ‘obviously an awful number, but not as catastrophic as expected.’ Zandi expects unemployment to reach 20% for May, but then stabilize around 10% after that.
ADP found that businesses shed 19.6 million jobs in April – the most in company history. Since then, things have started to turn around. Continuing claims, which are defined as lasting more than two weeks, tumbled by 3.9 million to 21.1 million in ADP’s most recent reporting week.
The report found that service industries lost 1.967 million positions in May, versus goods producers who lost 794,000 roles. Trade, transportation, and utilities saw some of the worst of it, losing a combined 826,000 positions. Manufacturing lost 719,000 jobs. Financial activities shed 196,000 roles.
The Department of Labor’s May unemployment estimate will come out on Friday. Expectations are that the economy will give up 8.3 million positions in May, pushing the unemployment rate up to 19.5%. In April, unemployment climbed to 14.7%.