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Interesting Trends for Small Business Hiring

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In terms of hiring this past winter season, small businesses suffered through a pretty rough patch. Plenty of economic experts blamed the poor hiring on the incredible amount of snowstorms that wreaked havoc on the country. Even though the weather has begun to change, hiring did not do the same last month, according to The Washington Post.

In the month of March, small businesses across the country added just 72,000 jobs. This is a decrease from the 76,000 jobs added at small businesses in the month of February. The number is also much lower than the 113,000 added in the month of November. The numbers were released as part of a report from ADP on Wednesday. The same report said that companies producing tangible goods added only 9,000 jobs.

At the same time, Intuit said that hiring at small businesses increased by just 0.01 percent for March. This occurred after zero job growth in February. ADP said that the share of the nation’s new jobs for small businesses dropped below 40 percent for the second time in the last year. The country added some 191,000 jobs in March.

Since 2013 began, the only other time small businesses experienced such a low portion of the country’s job gains was in October of 2013. The reason for those low numbers was caused by the government shutdown. This caused small businesses to halt their hiring.

The chief economist for Moody’s Analytics, Mark Zandi, said that the poor numbers for small businesses is likely due to the slow housing rebound than the nasty winter season.

“The key to small business job growth is the housing recovery,” Zandi said. Zandi also said that construction, home improvement and landscaping firms are usually small. “The big guys are not as tied to housing, at least not to the same degree.”

Zandi discussed that the housing market rebound has begun, but it has happened very slowly. He stated the difficulties in credit availability, interest rates, and underwriting standards might delay the recovery process even more.

Zandi continued with an alarming trend seen with new businesses. New businesses tend to account for a large share of the job growth in the country from month to month.

“A lot of the growth among small businesses usually comes from fast-growing start-ups, and that’s just not happening right now — but at a very low level.”

“Unless that changes,” he added, “I think that’s going to be a problem moving into the second half of the decade.”

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Interesting Trends for Small Business Hiring by
Authored by: Harrison Barnes