Jobs Report

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 October and reflects the responses of 1,502 sampled NFIB members.

Nov. 2014 Small Business Jobs Statement from NFIB’s Chief Economist:
No Clear Direction for Hiring Among Small Employers

Small firms that added jobs cancelled out by firms that shed workers

NFIB’s chief economist William C. Dunkelberg, issued the following comments on NFIB’s November 2014 Jobs Report:

Bill "Dunk" Dunkelberg
NFIB Chief Economist
William Dunkelberg

“While it took four years for real GDP to regain its previous peak, it took seven years for employment to recover. Over that period, the population grew by about 20 million and the labor force participation rate fell. Labor markets, although improved, are still sloshy. Basically there’s no clear direction among small employers.

Seasonally adjusted, 13 percent of the owners (unchanged) reported adding an average of 2.7 workers per firm over the past few months. Offsetting that, 10 percent reduced employment (unchanged) an average of 2.9 workers, producing the seasonally adjusted net gain of 0.0, workers per firm overall, a decline but at least not negative. Reductions in employment are becoming less frequent and smaller so initial claims for unemployment remain low, but hiring is not showing much strength. Observers are now capitulating and calling the current jobs performance “good”, but that’s because they forgot what real job creation looks like in a real expansion. It’s good only to the extent that employment isn’t shrinking. But it signals real disagreement among small employers over whether it’s safe to add sorkers, which is what the economy badly needs.

“The remaining 77 percent of owners made no net change in employment. Fifty-three percent of the owners hired or tried to hire in the last three months and 45 percent reported few or no qualified applicants for open positions.

Small business jobs data for October 2014

Twenty-four percent of all owners reported job openings they could not fill in the current period, up 3 points, a good sign for improvements in the unemployment rate. Fourteen percent reported using temporary workers, down 1 point. Historically, readings this high only occurred in periods of strong growth.

Unfilled job openings at small businesses in October 2014

“Job creation plans improved a point to a seasonally adjusted net 10 percent. Not seasonally adjusted, 13 percent plan to increase employment at their firm (unchanged), and 9 percent plan reductions (unchanged). Not a lot of strength in these numbers but consistent with steady growth in employment.

Small business job creation date in Oct. 2014

“The economy grew at a 3.5 percent pace in Q3, distinctive in comparison to the 2.2 percent growth recorded to date in this expansion. However, the domestic economy did not enjoy that much strength, with Gross Domestic Expenditures (GDP minus Exports) growing only 2.1 percent and consumer spending advancing at a 1.8 percent pace, down from 2.5 percent in the second quarter. Net exports added 1.3 percentage points to the growth rate, great for the big firms. And a surge in government spending, mostly defense, added 0.8 percentage points, not likely to repeat next quarter. So the fundamental economy remained operating in the 2.2 percent growth range, and that’s the economy that matters to small businesses. With 3 million more people each year in the economy, more services and goods will be required, increasing spending modestly along with an increasing need to replace depreciated equipment. But no surge in spending and hiring appears likely.”

Results of the full survey will be released on Tuesday, November 11, 2014.

 

NFIB Chief Economist Bill Dunkelberg on the October 2014 jobs numbers

 
To interview NFIB's chief economist Bill Dunkelberg, please contact Jack Mozloom at 609-462-5610 or jack.mozloom@nfib.org

 

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