Payrolls dip amid winter virus surge

The number of employees at U.S. businesses unexpectedly declined in December for the first time since April, underscoring the immediate economic impact of mounting coronavirus cases across the country.

Company payrolls decreased by 123,000 during the month, concentrated in leisure and hospitality and retail, according to ADP Research Institute data released Wednesday. The prior month was revised down slightly to a 304,000 gain.

Private payrolls remain almost 10 million short of pre-pandemic levels.

The data indicate the ongoing labor market fallout from the virus, which is only expected to worsen this winter as cases of COVID-19 increase.

“The underlying story here is the impact on the services sector from the patchwork of antiCOVID measures imposed across the country in the fourth quarter, alongside people choosing to reduce their social interactions in the face of soaring infections,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd, said in a note.

The figures precede the monthly jobs report on Friday, which is projected to show weaker payroll growth.

ADP’s payroll data represent firms employing nearly 26 million workers in the U.S.