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Small businesses were responsible for the entirety of the 27,000 net jobs that the private sector shed in March, according to a closely watched employment report by payroll provider ADP.
Why it matters: The extent of job losses is much worse than the ADP survey suggests, as it was conducted before states stepped up coronavirus containment efforts. But it shows that America's smallest businesses were hit hardest first, even as bigger corporations continued hiring.
By the numbers: Businesses with fewer than 50 employees shed 90,000 jobs in March, ADP found — making it the worst job loss for that group since April 2009, per Bloomberg. In February, those employers added 24,000 jobs.
- The private sector's net job loss of only 27,000 was possible only because larger businesses were still adding workers — albeit at a slower pace than in prior months — offsetting some of the losses from smaller firms.
- Companies with between 50–499 employees added 7,000 jobs.
- Businesses with more than 500 but less than 1,000 workers added 1,000 jobs, while the largest businesses (with 1,000+ employees) added 55,000 jobs.
What to watch: The coronavirus stimulus package passed by Congress allocates $350 billion in relief for small businesses, which can apply for loans starting on Friday.
- The loans are meant to incentivize businesses to rehire workers.
- Cash that's used to rehire and pay workers, among other things, doesn't need to be repaid.
Yes, but: The program, which works on a first-come, first-served basis, likely won't be large enough to satisfy the needs of all of America's small businesses.
- If that's the case, Treasury Secretary Steven Mnuchin will go back to Congress and ask for more funding, he told CNBC Wednesday.
The bottom line: "Payrolls of small businesses are most vulnerable to the drop-off in activity seen as a result of the outbreak," Rhea Thomas, an economist at Wilmington Trust, wrote in a note on Wednesday.