Yahoo Finance Small businesses add jobs and hike pay in 'historic' market: NFIB
Small businesses continued to add jobs and hike worker pay in June, a new report showed on Friday, underscoring how U.S. employment has remained surprisingly firm in an otherwise uncertain economy.
According to the National Federation of Independent Businesses (NFIB) monthly jobs report, June was the 19th month of consecutive employment growth, and small business owners added an average of 0.21 workers per firm.
Meanwhile, 12% of small business owners ramped up employment by an average of 4.3 workers per firm, while only 7% of small business owners reduced employment at a seasonally-adjusted average of 4.6 workers per firm.
Some 28% of employers also said they raised compensation at their firms, down slightly from last month but still at historically strong levels, the organization said.
“At a time when owners are continuing to struggle to find workers, they’re doing everything they can to recruit them, including raising wages,” said NFIB President and CEO Juanita D. Duggan.
“The demand for workers is showing no signs of abating, evidence that tax cuts and deregulation lead to job creation, so it is important lawmakers stay away from policies that could stifle this historic growth,” she added.
Yet signs suggested the hot market for small businesses might be growing too fast. According to the NFIB, 58% of employers reported hirings or trying to hire, a 4 point dip from last month.
Still, 86% of those trying to hire reported very few to zero qualified applicants for the positions that needed to be filled.
“Twenty-one percent of all owners cited the difficulty of finding qualified workers as their Single Most Important Business Problem… This shortage of workers is slowing growth,” wrote analysts from NFIB.
Labor shortages an issue
The NFIB’s report comes on the heels of a June nonfarm payrolls report that surprised to the upside. The U.S. economy created 224,000 jobs last month, well above consensus estimates, in the face of widespread global uncertainty and a U.S.-China trade war.
“Small business owners have been reporting raising worker compensation, wages, and benefits, at historically near-record percentages for more than a year,” Dunkelberg said.
“The economy is showing wage gains and small business has been leading the way,” he added.
The NFIB data showed some sectors struggling to fill skilled jobs a still hot job market: 39% of owners in transportation cited a shortage of workers as their main problem.
Meanwhile, 69% of transportation owners had job openings, but the majority were for highly qualified candidates. Separately, 49% of construction owners had openings but some 90% of the jobs they needed filled were for skilled applicants.
“The current labor shortage is the biggest issue facing the small business economy,” Dunkelberg later added.
Donovan Russo is a writer for Yahoo Finance. Follow him @Donovanxrusso.
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