U.S. small business hiring up despite government shutdown

WASHINGTON Wed Nov 6, 2013 11:39am EST

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WASHINGTON Nov 6 (Reuters) - U.S. small businesses stepped up hiring in October, despite uncertainty brought by a partial shutdown of the federal government, a survey showed on Wednesday.

The National Federation of Independent Business said small business owners added an average of 0.11 workers per firm last month, reversing September's decline.

"In spite of the government shut-down, employment rose among small firms in October," the NFIB said in a statement.

The increase in hiring by small businesses is an encouraging sign for the economy amid estimates that the 16-day government shutdown could have sliced off as much as 0.6 percentage point from fourth quarter gross domestic product (GDP) growth.

The NFIB's findings come ahead of the release on Friday of the government's comprehensive employment report for October, which is expected to show that the shutdown held back hiring.

Non-farm payrolls are forecast to have risen by only 125,000 jobs last month, according to a Reuters survey of economists, down from an increase of 148,000 in September.

The NFIB survey found that 12 percent of small business owners throughout the country added an average of 3.5 workers per firm over the past few months. That was a slight improvement from prior periods.

About nine percent of businesses, the smallest share since 2006, reported laying off an average of 2.8 workers.

"Reports of workforce reductions have reached sub-normal levels. But owners report sub-par levels of hiring, so job growth remains anemic," the NFIB said.

There was a slight increase in the share of business owners reporting hard-to-fill job openings. There was also a modest increase in the number of employers hiring temporary workers.

Temporary employment is seen as a harbinger of future hiring, but could also indicate reluctance by employers to take on full-time workers because of uncertainty related to health care regulations and the economic outlook.

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