After rebounding in August, hiring significantly slowed last month among small businesses across the U.S., according to top 15 accounting firm CBIZ.
The CBIZ Small Business Employment Index (SBEI), which tracks payroll and hiring data for more than 2,800 companies with 300 or fewer employees across the U.S., indicated a seasonally adjusted decrease of 2.60% in September as the third quarter comes to a close.
Fifteen percent of companies in the index increased staffing, 58% made no change to their headcounts, and 27% reduced employment totals.
The hiring data indicates a weakening labor market, marked by widespread job losses across all regions, CBIZ said.
The Bureau of Labor Statistics’ employment report indicated hiring growth that soared past expectations. The September reading showed an overall increase of 254,000 private-sector jobs, while the national unemployment rate fell slightly to 4.1%. The report is inclusive of all non-farm private employers across businesses of all sizes.
The ADP employment report indicated hiring growth among medium and large-sized companies. Its September reading showed an overall increase of 143,000 private-sector jobs for the month. Despite overall growth, small businesses experienced a decrease of 8,000 jobs on a seasonally adjusted, month-over-month basis. The ADP report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
“There is a combination of economic data that is likely to influence hiring decisions,” Anna Rathbun, CFA, chief investment officer for CBIZ Investment Advisory Services, said in a statement. “The positive jobs numbers seen in the Bureau of Labor Statistics report is contrasted by consumer confidence, JOLTS [Job Openings and Labor Turnover Survey], and additional headwinds that are painting a different picture for small businesses and the wider economy.”
All industries in the U.S. experienced job losses in September. The Northeast (-2.87%) saw the steepest decline, followed by the Central (-2.77%), Southeast (-2.50%), and West (-1.14%) regions, CBIZ said.
On an industry level, insurance; not-for-profit; and transportation saw an uptick in hiring, but arts, entertainment and recreation; manufacturing; and technology and life sciences reported the largest job losses.
“If you take a look under the hood, the JOLTS survey showed an increase in job openings, but beneath that headline, there was notable weakness as the quit rate fell to its lowest level since August 2020,” Rathbun said. “Confidence in the strength of the labor market is waning among Americans, and this aligns with the recent Conference Board consumer survey, which also highlighted a lack of confidence in the labor market. It’s important to consider the various data sources in totality to understand the trends in the American jobs market.”
What’s next? CBIZ said, “Small businesses still have a reason for optimism following the Fed’s interest rate reduction. There are no immediate implications of these data models on the market and broader economy, but small business owners could feel a trickle-down effect from the recovery of Hurricane Helene in the Southeast as costs for building materials, insurance, and other items could rise.”
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Tags: Accounting, Human Resources, Payroll, Small Business
