ADP jobs report eases recovery anxiety — for a time
Wall Street is breathing a sigh of relief after ADP, the largest private payroll provider said that 2.8 million jobs were lost last month versus estimates of 9 million losses.
The discrepancy shows just how difficult projections are due to the COVID crisis.
The news has buoyed the market which has seen the Dow Jones Industrial average break over 26,000 for the first time since the lockdown-inspired contraction of the economy.
Tweets Investing.com: BREAKING: *U.S. ADP PRIVATE PAYROLLS DROP BY 2.76 MILLION IN MAY, MUCH BETTER THAN EXPECTATIONS FOR A LOSS OF 9 MILLION JOBS
Says Charles Payne, Fox Business host: “Maybe the experts are wrong – maybe the economy comes back sooner rather than later.”
The losses were led by trade, utilities, transportation and manufacturing jobs.
“The impact of the COVID-19 crisis continues to weigh on businesses of all sizes,” Ahu Yildirmaz, of ADP said in the report, “While the labor market is still reeling from the effects of the pandemic, job loss likely peaked in April, as many states have begun a phased reopening of businesses.”
One administration official, White House senior advisor, Kevin Hassett, cautions that the ADP report was so good that a deeper dive into the data is needed.
The Trump administration is hoping for a quick recovery so that he can make the case that economy is in better hands with him at the helm than Joe Biden. The latest employment numbers should also help bolster the case that unemployment insurance should be tapered off.
When asked by Fox’s Maria Bartiromo about what the administration intends to do about unemployment insurance slowing down job growth, Hassett says the admistartion will be meeting this week to discuss it.
“We are absolutely meeting this week,” Hassett said. “We are going over what we think will be in the phase four deal [for COVID relief], and we’re going to try to reform unemployment insurance so that the factor you suggested goes away.”
Yesterday, the Senate provided a preview of what the next phase of COVID relief could look like with witnesses appearing before the Senate Banking Committee and testifying in favor of bailout packages for city and state governments.
Republicans are opposed to the idea.
“Some Republicans have opposed including additional state and local aid in the next bill,” reports Roll Call, “saying the $150 billion provided in the last package, along with the Fed’s Municipal Lending Facility, would be enough.”
It remains to be seen what Trump will do.
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