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Thursday, October 06, 2011

Survey: Small Business Owners report reduction in employment, hiring plans slightly positive

by Calculated Risk on 10/06/2011 07:18:00 PM

Note: NFIB’s monthly small business survey for September will be released on Tuesday, October 11, 2011.

From the National Federation of Independent Business (NFIB): NFIB Jobs Statement: No News is Bad News; More Jobs Lost

“There is no good news to report. Until sales improve, until it becomes cost-effective to hire new workers, we cannot expect small-business owners to take advantage of new hiring tax credits and increase their employee rolls. ... For the fourth month in a row, small-business owners reported an overall reduction in employment, posting an average reduction of 0.3 workers per firm." [said William C. Dunkelberg, Chief economist for (NFIB)]
And looking ahead, 11 percent plan to increase employment (unchanged) over the next three months, while 12 percent plan to reduce their workforce (also unchanged), yielding a seasonally adjusted net 4 percent of owners planning to create new jobs, one point lower than August and far below the double digit readings that are typical during an expansion.
Note: Small businesses have a larger percentage of real estate and retail related companies than the overall economy.

Small Business Hiring Plans Here is a graph of the net hiring plans for the next three months since 1986.

Hiring plans were still low in September, but still positive and the trend is up.

It is no surprise that small businesses are struggling due to the high concentration of real estate related companies in the survey. But as Dunkelberg noted, until sales improve (lack of demand) small business hiring will remain weak.

• On the employment report tomorrow: Employment Situation Preview: Another Weak Report

CoreLogic: Home Price Index declined 0.4% in August
Weekly Initial Unemployment Claims increase to 401,000
Reis: Apartment Vacancy Rate falls to 5.6% in Q3