According to a report by ADP and Moody’s Analytics on Wednesday, companies cut the workforce by 27,000 in early March before the worst economic freeze caused by the corona virus occurred.
The actual losses for the month were far worse, as the millions of people who have already applied for unemployment showed. Wednesday’s report covers the period through March 12.
It was the first time in 10 years that the number of private employees fell, and the total job loss is likely to be 10 to 15 million, said Mark Zandi, chief economist at Moody’s.
“Steady, solid employment growth has passed 10 years in a row and the virus has put an end to it,” Zandi said in a media conference call.
“There are much bigger job losses,” he added.
Only 6% of companies said they were hiring at a worse level than during the financial crisis and comparable to around 40% for a typical month, Zandi said.
Economists interviewed by Dow Jones had forecast a loss of 125,000 jobs. However, the March ADP count and Friday’s non-agricultural payroll report cover periods before the government takes social distancing measures that have brought large parts of the US economy to a standstill.
The ADP figure for March is based on a profit of 179,000 in February, which was revised lower than the originally reported 183,000.
The only employment figures that measure the effects of the corona virus in real time are weekly initial unemployment claims. Last week’s initial applications were close to 3.3 million, and are expected to show an additional 3.1 million when this figure is released on Thursday.
However, the ADP count shows that companies have already started to restrict a roaring job market.
Small businesses accounted for all of the cuts, with 90,000 removed from the payrolls, with 66,000 of those cuts coming from companies with 25 or fewer employees.
Medium-sized companies with 50 to 499 employees added 7,000, while large companies employed 56,000.
The largest job cuts came from trade, transportation and utilities (-37,000), followed by construction (-16,000) and administrative and support services (-12,000). Professional and technical services built 11,000 jobs, while manufacturing increased by 6,000.
In general, the service industries lost 18,000, while commodity producers fell 9,000.
The ADP report generally serves as a precursor to the more closely monitored report on non-agricultural payroll, although the March government balance sheet will also be less relevant, as its reference period extends until March 12, just like ADP . Economists interviewed by Dow Jones expect the Department of Labor numbers in March to be 10,000 after the 273,000 profit in February.
Estimates of how bad job losses related to coronaviruses will vary widely. The St. Louis Federal Reserve has forecast up to 47 million layoffs and an unemployment rate of 32%, although most of the other forecasts were less dire.