Market Trends

Small Business Hiring in June Reveals a Flat Reading

Report: A slight decline in hiring to wrap up Q2

The CBIZ Small Business Employment Index reported a seasonally adjusted .08% in July 2024.

July 09, 2024 — CLEVELAND–(BUSINESS WIRE)–The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted decrease of 0.08% in June, a month that typically sees positive hiring momentum due to seasonal trends. The CBIZ SBEI tracks payroll and hiring trends for over 2,900 companies that have 300 or fewer employees, providing broad insight into small business trends.

The Bureau of Labor Statistics’ employment report indicated hiring growth that met expectations. The June reading showed an overall increase of 206,000 private-sector jobs. The national unemployment rate rose slightly to 4.1%. The report is inclusive of all non-farm private employers across businesses of all sizes. Similarly, the ADP employment report indicated hiring growth among small, medium, and large-sized companies. Its June reading showed an overall increase of 150,000 private-sector jobs for the month. Small businesses accounted for an increase of 5,000 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.

Is The Employment Market Cooling?

“There is a lot of economic data pointing towards a cooling employment market,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Investment Advisory Services, LLC. “The June labor market update from the Bureau of Labor Statistics continued the trend of weakness under strong headline nonfarm payroll gains and downward revisions in job gains from previous months. If this trend continues it will likely help the Federal Reserve’s decision to reduce interest rates, however for small businesses and job seekers it lends to a period of uncertainty.”

  • On a regional basis, the Central (0.67%) and Northeast (0.25%) both experienced an increase in hiring. The West (-1.89%) saw the largest decline in hiring, followed by the Southeast (-1.27%) region.
  • On an industry level, Administrative and Support Services; Retail; and Technology and Life Sciences saw the largest increases in hiring. Accommodation and Food Services; Arts, Entertainment and Recreation; and Not-for-Profit reported job losses.
There is a lot of economic data pointing towards a cooling employment market...

Rathbun added, “June is normally a positive month of job gains as the summer season is in full swing, but there were some challenges that were uncharacteristic of the season. Typically, we expect summers to see healthy job creation in food services, but this was the area that was hardest hit. It was also surprising to see challenges in the Arts, Entertainment, and Recreation industry for the month of June. The softness in the service industry was corroborated in the BLS’s jobs report for June, which saw accommodation and food services losing 2,400 jobs.”

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

Additional takeaways from the June SBEI include:

  • June’s snapshot: 19% of companies in the index increased staffing, 60% made no change to their headcounts and 21% reduced employment totals.
  • Industries at-a-glance: Administrative and Support Services; Retail; and Technology and Life Sciences experienced hiring gains. Decreases were seen in Accommodation and Food Services; Arts, Entertainment and Recreation; and Not-for-Profit.
  • Geographical hiring: The Central (0.67%) and Northeast (0.25%) regions reported hiring increases, while the West (-1.89%) and Southeast (-1.27%) regions reported hiring decreases.
  • What’s next? It remains to be seen how the rest of the summer will unfold for businesses that represent the hallmark of summer activities, such as travel and leisure. Whether this trend will continue into July and August, or if June was an anomaly, is yet to be determined.

 

(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.
About CBIZ
CBIZ 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 120 offices in 32 states, CBIZ is one of the largest accounting and insurance brokerage providers in the U.S. For more information, visit https://www.cbiz.com.

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