Small business hiring falls again in June: NFIB

WASHINGTON Wed Jul 3, 2013 3:48pm EDT

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WASHINGTON (Reuters) - U.S. small business employment edged down for the second straight month in June, sharply contrasting with other data showing an improvement in the tone of the labor market last month.

The National Federation of Independent Business said the net change in employment ticked down by 0.09 workers per firm after slipping 0.04 in May.

"A higher percentage of the owners hired, but those that reduced employment made cuts large enough to put employment growth among existing firms in the red," the NFIB said in a statement on Wednesday.

The NFIB's findings are at odds with other data that have painted a far more upbeat picture of the jobs market.

The ADP National Employment Report on Wednesday showed private employers added 188,000 jobs to their payrolls in June, a step up from the 134,000 positions created in May.

Employment in the service industries touched its highest level in four months in June, the Institute for Supply Management also said on Wednesday.

Added to that, first-time applications for state unemployment benefits held at lower levels for much of last month, giving hope to another month of steady job gains in June.

The NFIB survey found that 11 percent of small business owners throughout the country added an average of 3.6 workers per firm over the past few months.

About 12 percent reduced employment by an average of 4.3 workers. The share of business owners reporting few or no qualified applicants for job openings was 41 percent.

Small business hiring has been sluggish. There has been speculation that the Affordable Care Act, which compels employers with a staff complement of at least 50, was making some small business owners reluctant to add workers.

The Obama administration on Tuesday delayed the employer mandate of the legislation until 2015.

Economists at UBS in New York reckon the one-year delay could prompt small business owners to hire more workers.

"For those employers on the cusp of the 50 employee threshold this delay may prompt them to hire as they may be unwilling to continue to postpone hiring to avoid being subject to the mandate," UBS said in a research note.

(Reporting by Paige Gance; Editing by Chris Reese)

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Comments (4)
NormAmerican wrote:
As a small manufacturer, I would say the NFIB report is closer to what I am seeing. There are a lot less quotes for new work. It is definitely slowing down.

Jul 05, 2013 11:30am EDT  --  Report as abuse
jorge62 wrote:
Were these service sector jobs mostly created? If so, these are not very good paying jobs.

Jul 05, 2013 11:40am EDT  --  Report as abuse
jorge62 wrote:
Were these service sector jobs mostly created? If so, these are not very good paying jobs.

Jul 05, 2013 11:40am EDT  --  Report as abuse
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