The CBIZ Small Business Employment Index (SBEI), which tracks hiring trends among thousands of companies that employ 300 or fewer employees across the U.S., reported a month-over-month decrease in hiring of 2.03 percent in July, following an increase in hiring of 1.73 percent in June.
Forty-nine percent of companies in the SBEI did not make a change to their staff totals, while 21 percent of companies increased employee counts and 30 percent decreased headcounts. The July period has averaged a hiring decrease of 0.99 percent since the index's inception in 2009. Additionally, Agriculture, Insurance, and Wholesale Distribution showed labor market growth during July. Transportation, Education, Non-Profit’s, and Accommodation and Food Services, showed a decline while construction recorded a nearly flat figure with a 0.11 percent decline. Regionally, all four areas of the country saw employment decreases, The West region posted the largest decrease of 3.74 percent. The Northeast, Central, and Southeast regions posted declines of 0.77 percent, 2.11 percent and 1.65 percent, respectively.
While July’s reading shows the second largest decline since 2009, this month historically shows a seasonal decline as employees reach full staffing for the requisite summer months’ demand. While a larger decline indicates that there may be more at work, the statistic doesn’t necessarily mean that the economic growth cycle is at an end. According to the National Federation of Independent Business, more employers than ever are hiring or attempting to hire workers but citing the ability to find qualified workers as their single-largest business concern. This could mean we are quickly approaching the final stages of slack in the labor market, and as participation reaches its maximum potential, given our workforce population, wages may begin to increase.