Jobs are disappearing fast, with 598,000 gone in January, on top of nearly as many lost in December. They’re disappearing from small businesses. Payroll provider ADP estimates that companies with fewer than 50 employees shed 175,000 jobs in January (via Small Biz Labs). Unemployment hit 7.6 percent, highest since 1992.
Worst hit are people and companies who make and sell things, rather than services. Manufacturing, construction, retail, are taking a beating, while health care and education grew. (Check Bloomberg for a detailed breakdown of sector and industry.) Economists are saying that the stimulus package, which Congress is now trimming, may not be big enough. From the Times:
Ian Shepherdson, chief North American economist for High Frequency Economics in Valhalla, N.Y., said the government had become the only source of energy left to break the cycle of slumping demand for goods and falling production.
“The public sector needs to act,” Mr. Shepherdson wrote in a note to clients. “It needs to prevent an endless spiral of attempts to increase saving, leading to reduced spending, leading to reduced incomes, leading to further attempts to raise savings, and so on.”
“We remain firmly of the view that the package now in Congress is the bare minimum required to slow the shrinkage of the economy over the next year.”
There’s little good news for anyone here, especially small businesses. One silver lining is that for those rare companies that are hiring, there are ample prospects ready to jump an any offer. Even if you’re not hiring full-time, there are suddenly lots of talented people with little to do all day. Some of them used to work for your competition, or corporate giants like Citi or Microsoft, or leaders in your industry. Maybe now is the time to find them, see if they help you as contractors, or collaborate in some way. Maybe just meet for coffee and make a connection. Look ahead six months or a year or however long it is before we start to climb out of this mess. Can you connect with the most talented people in your industry now, since many of them are looking for work, in a way that will yield benefits when the recovery finally starts? If you don’t do it now, will you regret it?
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