April Job Losses Top 20 Million in Early ADP Employment Report
Economic Report Monitor #29
May 6th, 2020
The headline economic report today was the ADP National Employment report with the preview of the official Department of Labor. The headline data point reported a job loss of -20.2 million in April. As expected, a large amount of those jobs, over 16 million, fell off of the service sector. The two largest declines in the industry were leisure/hospitality, down -8.6 million, and trade/transportation/utilities, down -3.4 million. Nonessential closures and a slowdown in trade are most likely the blame there. Businesses of all sizes shrunk their workforces as well. Large companies shed the most at -9.0 million lost, and that was closely followed by -6.0 million. It's worth noting that -6.0 million in small business employment translates to a lot more businesses feeling pain and most likely shutting down. Larger corporations, like the public companies that have announced job cuts, are likely only seeing a sharp decrease in capacity utilization with plans to rehire when demand returns.
Two other smaller reports came out today. Both reported mostly unchanged conditions in the respective industries. MBA Mortgage Applications were basically flat at 0.1%. Purchasing remained slightly resilient up 6.0% but decelerating from the previous week of 12.0%. Refinancing saw its declines decelerate from -7.0% to -2.0%. It's likely that index won't see any movement until a major move in interest rates. Mortgage rates are basically the same as the previous week and remain just off the 52-week lows.
The weekly natural gas report was consistent with previous weeks. Stockpiles grew 70 Bcf last week which is still about the same level above historical measures, 54.9% above a year ago and 19.5% above the five-year average. Levels remain high as the EIA reports that the 2019-2020 winter saw the lowest natural gas withdrawal rate since 2015-2016. The decrease in consumption should continue to keep natural gas supply high until pumping slows down on the likelihood that energy companies will have to reduce operations under tight commodity price environments. Until then, Henry Hub futures sentiment will likely remain bearish through the end of the year.
May 6th, 2020
The headline economic report today was the ADP National Employment report with the preview of the official Department of Labor. The headline data point reported a job loss of -20.2 million in April. As expected, a large amount of those jobs, over 16 million, fell off of the service sector. The two largest declines in the industry were leisure/hospitality, down -8.6 million, and trade/transportation/utilities, down -3.4 million. Nonessential closures and a slowdown in trade are most likely the blame there. Businesses of all sizes shrunk their workforces as well. Large companies shed the most at -9.0 million lost, and that was closely followed by -6.0 million. It's worth noting that -6.0 million in small business employment translates to a lot more businesses feeling pain and most likely shutting down. Larger corporations, like the public companies that have announced job cuts, are likely only seeing a sharp decrease in capacity utilization with plans to rehire when demand returns.
Two other smaller reports came out today. Both reported mostly unchanged conditions in the respective industries. MBA Mortgage Applications were basically flat at 0.1%. Purchasing remained slightly resilient up 6.0% but decelerating from the previous week of 12.0%. Refinancing saw its declines decelerate from -7.0% to -2.0%. It's likely that index won't see any movement until a major move in interest rates. Mortgage rates are basically the same as the previous week and remain just off the 52-week lows.
The weekly natural gas report was consistent with previous weeks. Stockpiles grew 70 Bcf last week which is still about the same level above historical measures, 54.9% above a year ago and 19.5% above the five-year average. Levels remain high as the EIA reports that the 2019-2020 winter saw the lowest natural gas withdrawal rate since 2015-2016. The decrease in consumption should continue to keep natural gas supply high until pumping slows down on the likelihood that energy companies will have to reduce operations under tight commodity price environments. Until then, Henry Hub futures sentiment will likely remain bearish through the end of the year.
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