Much like the temperatures outside, small business job growth seems to be cooling down. According to the latest ADP Small Business Employment Report, small businesses added a modest 21,000 jobs in August – less than half the amount added in July (52,000). August marks the smallest month of job growth for small businesses this year (the second smallest was June, with only 29,000 jobs added). The ADP’s small business employment report looks at job growth specific to businesses with 49 or fewer employees.
A Closer Look at the Numbers
When looking at small businesses by size, very small businesses (those with 1-19 employees) added 9,000 jobs (down from 21,000 last month) and other small businesses (20-49 employees) added 12,000 jobs (down from last month’s 31,000).
Looking at small businesses by sector, the service-producing sector added 20,000 jobs in August (down from 45,000 jobs in July), while the goods-producing sector added 1,000 jobs (down from 7,000).
Comparison to Overall U.S. Job Growth
Overall job growth in August fell short of economists’ expectations. While economists expected a gain of 190,000 jobs in August, the U.S. only added 163,000, according to the ADP’s National Employment Report. This comes right after the biggest month for job gains since February. While these numbers might disappoint some, ADP’s vice president insists the job market “remains incredibly dynamic.” August marks the 93rd straight month of job gains in the U.S.
Looking at growth by business size and sector, mid-sized businesses added 111,000 jobs in August (down from 119,000 jobs in July), and large businesses added 31,000 jobs (down from 48,000). Looking at sectors, the goods-producing sector added 24,000 jobs in August (down from 42,000), and in the service-producing sector, the U.S. added 139,000 jobs (down from 177,000 jobs the previous month).
The industries adding the most jobs in July were professional and business services (38,000 jobs); education and health (31,000); and leisure and hospitality (25,000)). Natural resources and mining was the only industry that reported losses, at -1,000.
Last month, the U.S. added the lowest number of workers since October 2017, which economists speculate could be attributed to the tight labor market, which makes it hard for employers to fill positions. Small businesses in particular may be struggling. If you’re having trouble finding qualified talent for your business, consider CareerBuilder’s small business hiring solutions.