04 September 2013 19:06 [Source: ICIS news]
WASHINGTON (ICIS)--US small business owners further reduced their workforces in August, a leading trade group said on Wednesday, marking the fourth straight month of employment declines among the nation’s principal job-generating firms.
The NFIB report comes two days before the Department of Labor (DOL) is set to announce the official US employment figures for August.
NFIB chief economist William Dunkelberg said that “job growth in the small business sector is close to an oxymoron after [they] reported the fourth consecutive month of negative job creation”.
“Each of the last four months was worse than that which preceded it,” Dunkelberg said.
He said that 8% of US small business owners surveyed by the federation reported adding an average of 1.6 workers per firm over the past few months.
“But this was offset by the 11% who reduced employment by an average of 3 workers, producing the seasonally adjusted loss of 0.30 workers per firm overall,” Dunkelberg said.
The remaining 81% of small business owners made no net change in their labour forces, he said.
“In plain English, this means that the majority of small business owners did not hire new workers this summer,” he added.
Dunkelberg said that the recently revised US gross domestic product (GDP) second quarter growth rate to 2.5% from the initial estimate of only 1.7% had little impact on small business employment.
That GDP improvement, he said, “was driven almost entirely by gains in exports and inventory accumulation, neither much of a job driver and neither of which involves small businesses substantially”.
However, Dunkelberg said the August survey of small business owners suggests that employment prospects in the sector soon may improve.
He said that plans for future job creation rose by a large seven percentage points in August, meaning that 16% of small business owners now anticipate adding workers in months ahead.
“This is the best report since January 2007 and historically a very strong reading,” Dunkelberg said.
“If we assume this increase is not a fluke, it signals a substantial resumption of hiring in the coming months,” he said, adding: “We won’t hold our breath until it arrives, but we will cross our fingers.”
The well-being and confidence levels of the US small business sector are important because those entities - typically firms with 500 or fewer employees - account for 64% of the new jobs generated in the economy.
The NFIB represents some 350,000 ?xml:namespace>
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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