Gauging Small Business Hiring: Slower Growth, or 'Oxymoron'

The U.S. economy added 169,000 payroll jobs last month, according to data released this morning by the Bureau of Labor Statistics. How many jobs did Main Street businesses create? As always, gauging small business hiring trends depends on how you define “small,” and who’s doing the counting. But according to multiple surveys, small business hiring decreased slightly for the second consecutive month. Here’s the New Entrepreneur’s monthly rundown of small business hiring reports:

Businesses with fewer than 50 workers added 71,000 jobs, according to a monthly report from payroll services provider ADP. That was the smallest monthly gain since May, when small companies added 58,000 jobs. Businesses with less than 20 workers added 40,000 jobs last month, according to ADP.

Small business hiring trends worsened for the fourth consecutive month, according to a survey of National Federation of Independent Business members. (About 90 percent of NFIB members have fewer than 20 employees.) “Job growth in the small-business sector is close to an oxymoron,” NFIB Chief Economist William Dunkelberg said in a statement.

Small business owners were unfazed by negative hiring trends, according to the SurePayroll Small Business Scorecard. Seventy-two percent of business owners surveyed said they were optimistic about the economy—up from 45 percent last September—even as SurePayroll’s hiring index fell 0.2 percent.

The SurePayroll survey, which aims to reflect trends at businesses with an average of eight employees, also found 22 percent of small business owners would prefer to hire an independent contractor to a full-time employee. Fifty-one percent of those business owners said it was easier to hire contractors for a specific task than to develop a full-time position; 36 percent said contractors helped them save on taxes and benefits.

The CBIZ Small Business Employment Index, which polls about 3,500 companies with fewer than 300 workers, provides a more positive view of the hiring landscape, as the barometer for small business hiring trends rose 1.23 percent. That marks the first time the index has increased since May, though Philip Noftsinger, CBIZ president for payroll services, says that most of the new jobs are part-time positions.

The unemployment rate for self-employed workers, unincorporated, and unpaid family workers was 5.1 percent last month, according to the BLS, down from 5.3 percent in August 2012. The 169,000 jobs added last month were less than the median forecast of 96 economists surveyed by Bloomberg, which called for an increase of 180,000.

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