Photo: Joe Raedle/Getty Images

Private companies shed 2.8 million U.S. jobs last month, according to a report from payroll processor ADP and Moody’s Analytics.

Why it matters: It's way less than the nearly 9 million private sector jobs economists estimated would be lost in May, suggesting layoffs during the coronavirus crisis could be slowing sooner than Wall Street expected.

Between the lines: The job losses are still huge (over 3 times worse than the record seen before pandemic crushed the labor market), but way less than the revised 19.6 million historic job losses seen in April.

  • Weekly applications for unemployment have tapered off from the record highs in recent weeks, but remain historically high, and in the millions.
  • But that data only captures those who are laid off and seeking unemployment — it does not consider hiring in the economy.

What they're saying: "Job loss is abating. Layoffs peaked in late March, early April and winded down by the end of May," Moody's Analytics' chief economist Mark Zandi said on a call with reporters.

  • Zandi expects a return to job growth in June and expects the economy to regain half the jobs it lost by September.
  • "If we don't have a major second wave, and we get a little bit more policy support, the covid recession is over," Zandi says.
  • But the economic "recovery will be a slog," Zandi says, until a coronavirus vaccine or therapy is distributed broadly and widely.

By the numbers: Two sectors saw net job gains last month: education and "administrative and support services," which includes everything from landscaping to security services, plus temp help.

Here are the job declines by business size:

  • Large businesses (500+ workers): -1,604,000
  • Medium-sized businesses (50-499 employees): -722,000
  • Small businesses (fewer than 50 employees): -435,000

What's next: It's not a perfect proxy, but the ADP report is closely watched for what’s to come when the official jobs data is released on Friday, which also includes government jobs.

  • That's expected to show payrolls decline by over 8 million, with the unemployment rate hitting 20%.

Go deeper

1.4 million Americans filed for unemployment last week

Photo: Wang Ying/Xinhua via Getty Images

Another 1.4 million Americans filed for unemployment last week, the Department of Labor announced Thursday.

Why it matters: New applications for unemployment remain historically high, suggesting layoffs are still widely prevalent. However, they remain well below the all-time record seen when the coronavirus pandemic first hit.

Biden downplays jobs number, rebukes Trump for ignoring health crisis

Former Vice President Joe Biden on Thursday called June’s jobs report “positive news,” but warned that the worst is yet to come and accused President Trump of "giving up" on addressing the root public health causes of the coronavirus.

Driving the news: The Labor Department reported Thursday morning that the economy added 4.8 million jobs last month and that the unemployment rate dropped to 11.1% — down from 13.3%.

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