NFIB Small Business Jobs Report
The NFIB Research Foundation has collected Small Business Economic Trends data with quarterly surveys since 1974 and monthly surveys since 1986. Survey respondents are drawn from NFIB’s membership. The survey was conducted in July 2015 and reflects the responses of 620 sampled NFIB members.
July Job Creation Little Improved Over June
NFIB’s chief economist William C. Dunkelberg, issued the following comments on NFIB’s July 2015 Jobs Report:
“July’s reading, though better than June’s, was still close to the zero line and offers little to no support for a lower unemployment rate.”
“The NFIB job openings and the rising percent of owners reporting finding qualified labor as their top problem indicate that labor markets are tight. But a barrage of cost-raising regulations are also pushing up compensation costs and crowding out the potential for gains in take-home pay.”
“Overall, July’s labor stats are not likely to be much different than June’s.”
Job creation was flat in July. On balance, owners added a net 0.05 workers per firm in recent months, better than June’s -0.01 reading, but still close to the zero line. Twelve percent reported increasing employment an average of 3.7 workers per firm while 12 percent reported reducing employment an average of 3.5 workers per firm.
Fifty-seven percent reported hiring or trying to hire (up 5 points), but 48 percent (84 percent of those hiring or trying to hire) reported few or no qualified applicants for the positions they were trying to fill. Sixteen percent reported using temporary workers, down 2 points.
Twenty-five percent of all owners reported job openings they could not fill in the current period, up 1 point, but 4 points below the highest reading for this year. Historically correlated 0.9 with the unemployment rate, the one point increase in the July reading offers little support for a lower unemployment rate.
A net 12 percent plan to create new jobs, up 3 points reversing last month’s loss. Not seasonally adjusted, 16 percent plan to increase employment at their firm (unchanged after a 6 point fall in June), and 7 percent plan reductions (up 1 point on top of a 2 point increase in June). Regionally, job creation plans remained weakest on the East Coast. By industry, Manufacturing, Construction and the Wholesale trades reported the strongest job creation plans.
A seasonally adjusted net 23 percent of owners reported raising worker compensation, up 2 points from June, and 2 points below the expansion high reading reached in January and May. The net percent planning to increase compensation rose 4 points from June to a net 15 percent. The NFIB job openings and the rising percent of owners reporting finding qualified labor as their top buisness problem (now at 13 percent) indicate that labor markets are getting tighter. But a barrage of cost-raising reglations (health care, mandatory sick leave, family leave, overtime) are also pushing up compensation costs and crowding out the potential for gains in take-home pay.
Overall, July’s labor stats are not likely to be much different than June’s. From 1983 Q1 to 1990 Q1, the economy added an average of 690,000 jobs per quarter, compared to 350,000 in this expansion to date. The labor force was 40 percent smaller in 1983, so in comparison, current job creation is still anemic, even after adjusting for the size of the labor force.
Results of the full survey will be released on Tuesday, August 11, 2015.