Earth--moving machinery prepares building site for apartment complex. Image source: milesbeforeisleep © 123RF.com
The Automatic Data Processing Inc. (ADP) released its unemployment report on Wednesday, which represents a preliminary labour force survey preceding the government-compiled NFP report that is typically released on the first Friday of each month.
According to the findings of the ADP, 20,236 million people have become unemployed in the US over the previous month. These findings are unsurprising given that more than 30 million people have filed for unemployment benefits since the beginning of the crisis in mid-March.
The observed loss of jobs in the US is massive when the recent findings of the April ADP are compared to the data for the previous period, which measured a comparatively smaller deterioration of employment. In March, 149 thousand people had been thrown out of the labour force in the wake of the coronavirus crisis.
US ADP Unemployment Rate. Image source: TradingEconomics.com
Additionally, the findings of the report revealed that the Services Sector is by far the most severely hit part of the overall industry, with over 16 million lost jobs. In comparison, the Goods-producing Sector has registered nearly 4.300 million lost jobs.
As regards the Services Sector, the most jobs - 3.440 million - have been lost in Trade, Transportation and Utilities. Meanwhile, the most substantial losses in the Goods-producing Sector have been sustained in Construction – nearly 2.500 million.
The significant loss of jobs in the Construction sector posies particularly big threats for the broader economy, given the potentially adverse fallout that could impede the housing market in the States.
This, in turn, could cause separate problems reminiscent of the issues faced by the economy in the wake of the 2008 credit crunch.
Property prices could balloon in the following months due to the underlying ripples in the construction industry, which could lead to profound and long-lasting consequences for US homeowners.
Such gloomy scenarios for the future underpin the momentarily tumble of the Dow Jones Industrial Average, as well as of the S&P 500, following the release of the ADP report.
The Nasdaq index is a notable exception given the robust performance of tech stocks that is being observed during the current earnings season.
US Stocks Compariosn Chart. Image source: Trendsharks ©, created with TradingView.com
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