Majority of Small Business Industries Experience Job Loss in August

The CBIZ Small Business Employment Index showed a hiring downturn in 18 of the 25 tracked industries following two months of overall small business job growth

The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted decrease of 0.98% in August. In a reversal from June and July, 18 of the 25 industries that make up the index, representing much of the American economy, saw job losses. The CBIZ SBEI tracks payroll and hiring trends for over 3,600 companies that have 300 or fewer employees, providing broad insight into small business trends.

“There are still positive markers for the labor market including a pause in increasing initial jobless claims and an uptick in job openings,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ, Inc. “Small businesses are a leading indicator of economic health, so a dip in hiring points to uncertainty.”

The Bureau of Labor Statistics’ employment report indicated hiring growth that beat expectations. The July reading showed an overall increase of 315,000 private-sector jobs. Despite the overall hiring growth, the national unemployment rate reflected a minor increase to 3.7%. The report is inclusive of all non-farm private employers across businesses of all sizes. Similarly, the ADP employment report indicated collective hiring growth among small, medium-sized and large companies. Its August reading showed an overall increase of 132,000 private-sector jobs for the month. Both of these reports differ from the findings of the Bureau of Labor Statistics’ household survey which is seeing an increase in the number of unemployed Americans and more closely mirrors the findings of the SBEI.

The CBIZ SBEI’s regional data showed a hiring decrease in every region of the United States in August. The West (-1.83%) reported the largest hiring decline, followed by the Northeast (-1.59%), the Southeast (-0.87%) and the Central (-0.61%) regions.

On an industry level, the most notable hiring increases were seen in Administrative Services, Mining and Transportation. Arts and Entertainment, Education Services and Utilities experienced hiring declines.

“August normally does not see declines in Education Services as the school year begins,” added Rathbun. “A large swathe of the economy that had hiring reductions pointing to a general slowdown in economic momentum.”

To view an infographic with data from the employment index, visit the CBIZ website.

Additional takeaways from the August SBEI include:

August’s snapshot: 20% of companies in the index increased staffing, 56% made no change to their headcounts and 24% reduced employment totals.

Industries at a glance: Hiring gains were made in Administrative Services, Mining and Transportation. Decreases were seen in Arts and Entertainment, Education Services and Utilities

Geographical hiring: The West (-1.83%), Northeast (-1.59%), Southeast (-0.87%) and the Central (-0.61%) regions all experienced hiring decreases.

What’s next? Small businesses are continuing to be resilient in the wake of inflation and economic headwinds. The decrease in hiring and the household survey is something to watch as we enter the fall season.

Editor’s note:

(1) The SBEI illustration is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License. Based on our work at https://www.cbiz.com.

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About CBIZ

CBIZ, Inc. is a leading provider of financial, insurance and advisory services to businesses throughout the United States. Financial services include accounting, tax, government health care consulting, transaction advisory, risk advisory, and valuation services. Insurance services include employee benefits consulting, retirement plan consulting, property and casualty insurance, payroll, and human capital consulting. With more than 100 Company offices in 32 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.

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