January 3, 2019

CBIZ Small Business Employment Index shows uncharacteristic December flattening

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 0.49 percent in December, following an increase in hiring of 0.48 percent in November.

Fifty-two percent of companies in the SBEI did not make a change to their staff totals, while 24 percent of companies increased employee counts and 24 percent decreased headcounts. The December period has averaged a hiring increase of 1.15 percent since the index's inception in 2009. Additionally, Arts and Entertainment, Real Estate, Construction and, surprisingly, Healthcare posted decreases in hiring during December. Meanwhile, Professional Services, Retail Trade, Wholesale Distribution, and Non-Profits posted increases. Regionally, the Northeast, Southeast and Central regions saw employment decreases of 1.2, 0.93 and 0.34 percent, respectively. The West region demonstrated a hiring increases of 0.2 percent.

The December reading of the SBEI showed a flat reading diverged from historical trends for this period. December has typically shown a much more positive seasonal result, and this flat reading adds to an already nervous mood going into 2019. With many economists calling for a recession, it’s possible we are seeing the first signs of that now. Washington is unlikely to provide any fiscal help, with Congress now in full gridlock mode. We’ll have to wait and see if the Federal Reserve slows down its rate increases, based on the softening macro data.

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