Reflecting a significant loss of jobs at small businesses, payroll processor ADP released a report on Wednesday showing a modest decrease in private sector employment in the U.S. in the month of March.
ADP said private sector employment fell by 27,000 jobs in March after jumping by a downwardly revised 179,000 jobs in February.
Economists had expected private sector employment to plunge by 150,000 jobs compared to the addition of 183,000 jobs originally reported for the previous month.
The drop was much smaller than expected but still reflects the first decrease in private sector employment since September of 2017.
ADP also noted its national employment report, or NER, only utilizes data through the 12th of the month, which is the same period the Labor Department uses for its more closely watched monthly jobs report.
“As such, the March NER does not fully reflect the most recent impact of COVID-19 on the employment situation, including unemployment claims reported on March 26, 2020,” said Ahu Yildirmaz, co-head of the ADP Research Institute.
The drop in private sector employment came as small businesses cut 90,000 jobs, more than offsetting an uptick of 7,000 jobs at midsized businesses and the addition of 56,000 jobs at large businesses.
The report said employment in the service-providing sector fell by 18,000 jobs amid a notable decrease in employment in the trade, transportation and utilities sector, while employment in the goods-producing sector edged down by 9,000 jobs amid a drop in construction jobs.
On Friday, the Labor Department is scheduled to release its usually closely watched monthly jobs report, although the data may be viewed as old news amid the ongoing coronavirus pandemic.
Economists currently expect employment to decrease by about 100,000 jobs in March after jumping by 273,000 jobs in February. The unemployment rate is expected to rise to 3.8 percent from 3.5 percent.
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