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Private payrolls lose 20.2 million jobs in April, worst drop in ADP report history

Losses were led by the services sector, which shed more than 16 million positions

Job postings installed at an exit ramp off Interstate 79 in Zelienople, Pa. More than 20 million Americans lost their jobs in April, according to data Wednesday from ADP Research Institute. (Keith Srakocic/AP)
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U.S. companies shed 20.2 million jobs from their payrolls in April as the coronavirus pandemic brought the economy to a standstill and shuttered many of the country’s businesses, according to data Wednesday from ADP Research Institute.

April’s staggering number is the worst in the report’s history, which began in 2002, and is double the last record set in February 2009, during the Great Recession, Ahu Yildirmaz, co-head of the ADP Research Institute, said in a news release.

What’s more, the job losses do not fully represent the economic carnage of the pandemic, ADP said. The report uses data only through the 12th of the month, in keeping with the Bureau of Labor Statistics. More than 8 million Americans filed for unemployment in the weeks that followed.

“Private payroll jobs are evaporating at a rate not seen since the Great Depression, and if the 20.2 million newly unemployed don’t quickly regain their jobs as the states start to open back up, then indeed it will be the second coming of the Great Depression,” Chris Rupkey, chief financial economist at MUFG Union Bank, wrote in comments emailed to The Washington Post Wednesday.

“Whatever Washington is doing resting on their heels, the initial fiscal stimulus is not enough, and the payroll protection plan did not keep thousands of companies from laying off workers,” Rupkey said.

Services — including business and financial, education, administrative jobs and leisure and hospitality — saw the lion’s share of losses, shedding more than 16 million jobs in April. These losses were expected, as the service sector is most affected by the pandemic given the high number of public-facing positions that put workers in close contact with customers. But these jobs also are the axis of the U.S. economy, as the explosion of service sector positions fueled the decade of job growth seen since the Great Recession.

The United States has added nearly 19 million services jobs since 2010, with sectors like hospitality and transportation increasing their share of the workforce. These now account for more than 80 percent of U.S. jobs.

Over 10 million Americans filed for unemployment in March. Here are some of their stories. (Video: The Washington Post)

Goods-producing jobs — including mining, construction and manufacturing — also were hit hard, eliminating nearly 4.2 million positions. In terms of size, big businesses (with 500 or more employees) saw the most reductions to their payrolls, nearly 9 million jobs. Small businesses (with 50 or fewer employees) slashed 6 million positions.

The only areas that saw job gains in April were education, which added 28,000 positions, and management of companies and enterprises, which added 6,000.

“Unfortunately we should get comfortable with unprecedented pressure on the labor market despite pockets of the country reopening,” Mike Loewengart, managing director of investment strategy at E-Trade, said in comments emailed to The Post. “This pandemic has systemically changed the way we live and work.”

As bleak as these numbers appear, it is likely the worst is still to come. The U.S. economy suffered its sharpest decline since the Great Recession — 4.8 percent — from January through March, and Federal Reserve Chair Jerome H. Powell has warned second quarter economic data will paint an even darker picture.

Commerce Department data released last week underscored the economic severity. Consumer and business spending nose-dived in the first quarter, even with the economy shuttered for only half of March. Household spending tumbled 7.6 percent, and business investment sank 8.6 percent.

The Labor Department releases April numbers on Friday morning.