U.S. Private Jobs Post First Decline Since April, ADP Data Show
(Bloomberg) -- The number of employees at U.S. businesses unexpectedly declined in December for the first time since April, underscoring the immediate economic impact of mounting coronavirus cases across the country.
Company payrolls decreased by 123,000 during the month, concentrated in leisure and hospitality and retail, according to ADP Research Institute data released Wednesday. The prior month was revised down slightly to a 304,000 gain.
The median projection in a Bloomberg survey of economists called for an increase of 75,000 in December. Private payrolls remain almost 10 million short of pre-pandemic levels.
The data indicate the ongoing labor market fallout from the virus, which is only expected to worsen this winter as cases of Covid-19 increase. Infections in the U.S. South have already skyrocketed beyond other regional records and several states have extended virus-related restrictions, including California and Hawaii.
“The underlying story here is the impact on the services sector from the patchwork of anti-Covid measures imposed across the country in the fourth quarter, alongside people choosing to reduce their social interactions in the face of soaring infections,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd, said in a note.
S&P 500 futures remained lower after the figures as traders assessed the Georgia runoff for two Senate seats. The yield on the benchmark 10-year Treasury note held above 1% and the dollar fell.
The figures also precede the monthly jobs report on Friday, which is projected to show weaker payroll growth. Economists forecast that the government’s measure of private employment increased by just 50,000, with some projecting an outright decline for the month.
The ADP data show that service employment fell 105,000, led by a 58,000 decrease in leisure and hospitality payrolls and a 50,000 drop within trade, transportation and utilities. Payrolls at goods producers decreased 18,000 as factory jobs declined.
The overall drop was also concentrated in businesses employing more than 1,000 workers. Small firms shed 13,000 employees during the month.
ADP’s payroll data represent firms employing nearly 26 million workers in the U.S.
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