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 hiring decline in the reading for September, with a seasonally adjusted decrease of 0.20%. As small business hiring experiences losses for the second straight month, the data points to a weakness in the labor market.
In September, 22% of companies increased their headcounts, 54% reported no change to their employment totals, and 24% decreased their staffing. Transportation, Management, Technology and Life Sciences, and Utilities had gains in employment. Arts, Entertainment and Recreation, Professional Services, Government, and Rental and Leasing Services experienced the most notable declines in hiring.
From a regional perspective, the West (0.99%) was the only region to experience an increase in hiring. The Northeast (-1.02%) saw the biggest decline, followed by the Central (-0.19%) and Southeast (-0.03%) regions that had flat readings. Based on the communication from the Federal Reserve, tightening financial conditions and additional rate hikes are expected to continue. Employers in the retail and service-oriented sectors may begin looking at their staffing levels if these economic trends continue.
Anna Rathbun is Chief Investment Officer, CBIZ Inc.
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