Inside the ADP Jobs Report – Plenty of room for optimism
Bottom Line: After the worst month of jobs losses in American history, with over 20 million jobs lost in April, the biggest question coming out of May was whether we’d hit the bottom. Based on the ADP private sector jobs report the answer very well may be yes. Now, with nearly 2.8 million additional private sector jobs lost during the month, for a total of 23 million lost jobs since the pandemic began, the news was historically brutal. May’s job losses were the second worst in recorded history and what I’m about to say next doesn’t take away from that reality...however -there are encouraging takeaways within the report.
Based on the weekly unemployment filings we know that approximately 40 million people had at least temporarily lost employment during the lockdowns. What we didn’t know until now is how many people regained employment as reopening began. Rather than 40 million lost jobs we’re looking at net figure that’s nearly half- with 23 million lost jobs. We’re far from out of the woods because even while reopening it’s possible some companies won’t survive, or further layoffs may ensue, but it’s clear the overall destruction in the labor market isn’t near as severe as feared. It also raises the prospects for a quicker recovery if we can sustain progress from here. As for the findings within the report for May...
- -2.76 million private sector jobs
The industries with the worst losses were:
- #1 Trade, transportation & Utilities (826k jobs lost)
- #2 Manufacturing (719k jobs lost)
- #3 Professional & Business Services (250k jobs lost)
The industries which held up the best were Natural Resources & Mining, Financial services and IT. As for the destruction based on the size of businesses...
- Small businesses: -435,000
- Medium sized businesses: -722,000
- Large businesses: -1,604,000
If you’re looking for additional silver linings in a historically bad month in labor market, you can find it here. The job losses were smallest with smaller businesses. That’s encouraging because during normal times approximately two-thirds of Americans work for small businesses. Small businesses are also the tip of the spear in terms of interpretation of economic impact.
The question now becomes how many businesses will be able to reopen? It can take years to build a successful business but for many it will have only taken weeks of this shutdown to destroy them. It’s truly sad – especially since you did nothing wrong and you had no control of this situation. The government report will be out Friday to tie the government jobs piece into this puzzle. For now, it’s about controlling what we can control to make our communities and businesses great again – as soon as it’s possible. In South Florida, we need to rally around our businesses– we're the fourth hardest hit metro in the country and recovery won’t be quick or easy – but it will be faster if we support each other in the process.