U.S. private payrolls fell less than expected in May, with employers laying off another 2.76 million workers.
WASHINGTON: U.S. private payrolls fell less than expected in May, with employers laying off another 2.76 million workers.
The drop in private payrolls last month shown in the ADP National Employment Report on Wednesday followed a record 19.557 million plunge in April. Economists polled by Reuters had forecast private payrolls dropping by 9 million in May.
Though the worst of job losses is probably behind as businesses reopen, economists estimate that roughly one in four workers who were laid off or furloughed during the near shutdown of the country in mid-March to control the spread of COVID-19 were unlikely to be rehired.
Many bankruptcies are anticipated despite the government’s Paycheck Protection Program, part of a historic fiscal package worth nearly US$3 trillion, which offered businesses loans that could be partially forgiven if they were used for employee pay.
The ADP report, jointly developed with Moody’s Analytics, was published ahead of the government’s more comprehensive employment report for May scheduled for release on Friday.
While it has a poor record predicting the private payrolls component of the government’s employment report because of methodology differences, it fits in with economists’ expectations for another month of job losses in the millions.
According to a Reuters survey of economists, nonfarm payrolls probably declined by 8 million last month after plummeting by a record 20.537 million in April. The unemployment rate is forecast rocketing to 19.8per cent, a post-World War Two high, from 14.7per cent in April.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci)