Although the increase in small-business hiring is slower than ideal, small firms are continuing to hire, this according to the latest small-business survey by Intuit. Average employee compensation remains stagnant as the overall economy remains sluggish. See the following article from The Street for more on this.
Small-business employment inched higher in February, but the rate of increase is still soft, according to Intuit’s latest small-business survey.
The Intuit Small Business Employment Index rose by 0.26% during the month of February, to 95.21. It equates to roughly 50,000 jobs created nationwide — slightly lower than the January-adjusted data in which 60,000 jobs were added in the month, Intuit said.
Intuit’s monthly index tracks anonymous online employment data from approximately 60,000 small firms with fewer than 20 employees using Intuit’s online payroll program.
On the one hand, the index hasn’t reached comparable levels since December 2008, showing that improvement in small-business hiring has been made, according to Intuit’s data. Still, given the sluggish economy, the pace of increase is worrisome.
"Small businesses are hiring and their people are working more hours, but measures of compensation are pretty flat, showing that the labor market is still soft," said economist Susan Woodward, who worked with Intuit to create the index, in a statement. "While the rise in employment is good news, this rate of increase is still not going to get us back to full employment very fast."
Within the latest down cycle, more than 800,000 jobs in the sector have been added since hiring growth began in December 2009, Intuit says.
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Of the states in which Intuit has more than 1,000 small-business customers, Maryland had the best employment improvement — 0.8% month over month. Conversely, New York had the least improvement, with small-firm employment declining by 0.4%, Intuit said.
Hourly employees of small firms worked an average of 107.6 hours last month — a 24.8-hour work week. The numbers were a 0.1% increase from the previous month.
Meanwhile, average monthly compensation for small-business employees has remained flat at $2,612, down 0.1% from January, according to Intuit.
"Based on other analysis we’ve done on the data, we think that we are seeing higher hours because small businesses are increasing the fraction of their hourly workers who work full time," Woodward said.
The negative change to compensation means the labor market "is still soft," Woodward said. "Small businesses are hiring, but they do not have to pay up to get people."
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