October Small Business Employment Index Reflects Soft Labor Market
Small businesses created 30,000 new jobs in October, but employees are working fewer hours and making less money. These are among the results of this month’s update of the Intuit Small Business Employment Index, covering the period between Sept. 24 and Oct. 23.
The monthly report found that small business employment grew by 0.14 percent in October, equating to an annual growth rate of 1.7 percent. Hours worked and compensation both decreased by 0.2 percent and 0.06 percent respectively. Since the hiring trend began in October 2009, small businesses have created 660,000 jobs.
“While small business employment is up in October, it is not up by much,” said Susan Woodward, the economist who worked with Intuit to create the Index. “The softness of the small business labor market is not much of a surprise. The breath-holding in Europe over the timing and shape of the Greek bond default was likely weighing on economic decisions at firms of all sizes here, too, and delaying at least some purchase decisions. With the new European deal, there is now hope that this concern will be lifted.”
Additionally, average monthly pay for all small business employees was $2,622 in October, a 0.06 percent decrease compared to the September revised estimate of $2,623 per month.
“The seasonally adjusted trend in hours worked and compensation has turned down,” added Woodward. “This is a further sign of softness in the small business labor market. On the positive side, we do see an increase in the new hire rate and hourly wages for the approximately 65 percent of small business employees who are hourly.”
Another sign of hope is that while small business employment is up only slightly, none of the census divisions across the country show a decrease in employment.