The CBIZ Small Business Employment Index (SBEI), which tracks hiring trends among thousands of companies across the U.S. with 300 or fewer employees, saw a decline in the reading for August, with a seasonally adjusted decrease of 0.98%. Following two straight months of increased hiring, the reading for August suggests a general slowdown in economic momentum.
In August, 20% of companies increased their headcounts, 56% reported no change to their employment totals, and 24% decreased their staffing. Administrative Services, Mining and Transportation had gains in employment. Arts and Entertainment, Education Services and Utilities saw the most notable declines in hiring. Eighteen out of the 25 industries surveyed reported staff reductions. The 18 industries that saw job losses represent a diverse, large swathe of the economy, reflecting the employer caution in the tightening market.
All regions experienced a downturn in hiring, with the Northeast and West seeing the heaviest losses. From a big picture perspective, there have been a few data points that are positive on the labor market for the overall economy including a pause in the increase of initial jobless claims and an uptick in job openings. However, small businesses are a leading indicator of economic health, and the widespread decrease in small business employment points to a “tightening of the belt” in the context of rising prices and volatile financial conditions.
Anna Rathbun is Chief Investment Officer, CBIZ Inc.
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