Small Business Hiring Shows Second Month of Historic Decline
As states reopen and look to reignite local economies, the CBIZ Small Business Employment Index shows operating businesses were still shedding workers in May
The CBIZ Small Business Employment Index (“SBEI”) reported its second-largest decline in small business hiring, with its May reading showing a seasonally adjusted decrease of 2.53%. This data comes on the heels of the April reading, which recorded the steepest decline in the SBEI’s 11-year history, and underscores the enduring economic consequences of the coronavirus pandemic on small businesses that have continued to operate. The CBIZ SBEI tracks payroll and hiring trends for over 3,300 companies that have 300 or fewer employees, providing broad insight into small business trends.
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“These businesses cut staff in May, signaling the potential long-term impact on the U.S. economy.”
“The CBIZ SBEI is specifically focused on small business behavior as it relates to labor allocation, and the May metric shows many small businesses are operating, but continue to be negatively impacted by the pandemic,” said Philip Noftsinger, Executive Vice President, CBIZ, Inc. “These businesses cut staff in May, signaling the potential long-term impact on the U.S. economy.”
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The results of the ADP and Moody’s employment report are in sync with the CBIZ SBEI findings. In the ADP and Moody’s data, private-sector job losses reached 2,760,000 on a month-over-month, seasonally adjusted basis. Job losses for small businesses reached 435,000. 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.
To offer additional insight, the CBIZ SBEI examines data by region. In May, hiring declines swept the United States in the West (-3.93%), Southeast (-3.23%), Northeast (-2.99%) and Central (-1.96%) regions. The CBIZ SBEI also examines data based on industry. Hiring grew in Agriculture, Transportation, Real Estate, and Construction in May.
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