Small Business Hiring in July Spurred by Reemerging Consumer and Economic Momentum
The CBIZ Small Business Employment Index starts third quarter with solid growth, as economic recovery remains top of mind
The CBIZ Small Business Employment Index (“SBEI”) reported steady improvement in small business hiring in the month of July and posted a seasonally adjusted gain of 1.25% for the month. The reading is a departure from historical trends for the month, when hiring is known to flatten or decline. The CBIZ SBEI tracks payroll and hiring trends for over 3,400 companies that have 300 or fewer employees, providing broad insight into small business trends.
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“The proposed HEALS Act is just one potential driver, with additional aid slotted for small businesses.”
“Analysts previously cautioned the hiring landscape could lose steam in July, but the CBIZ SBEI showed continued growth,” said Philip Noftsinger, Executive Vice President, CBIZ, Inc. “This tells us the economy is regaining strength as activity picks up and consumers reignite spending, and the data is especially encouraging following steep economic declines in the second quarter.”
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The ADP and Moody’s employment report confirmed overall hiring growth, although the data fell short of economist consensus. Overall, private-sector employment increased by 167,000 on a month-over-month, seasonally adjusted basis, and small businesses added 63,000 jobs. The ADP and Moody’s report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
Notably, on a more granular level, the index compared small business hiring with state reopening data. States that opened on or before May 15 showed significant hiring growth (3.61%) from June to July, while states that opened after May 15 had much more modest growth (0.94%). Of the four major U.S. regions surveyed by the CBIZ SBEI, the Northeast (2.69%) and Southeast (2.52%) led seasonally adjusted hiring, while the West (1.00%) and Central (0.64%) showed slower growth.
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