Small Businesses Cautiously Bump Up Hiring; CFOs Less Upbeat
While overall job growth is below expectations, small businesses seem somewhat more optimistic about the economy than their counterparts at big corporations.
Small businesses are slowly increasing their hiring, and a new index of small business optimism rose by 1 point last month to 100.8, Reuters reported. The index, by the National Federation of Independent Business (NFIB), shows small business owners are “quite optimistic” about the economy, at least in the short term, NFIB Chief Economist William Dunkelberg said in a statement.
NFIB also termed “historically strong” the 4 percent increase in the net percentage of businesses planning to expand payrolls as opposed to those who plan to cut jobs. The NFIB found that 11 percent of 1,220 members surveyed in April said they planned to add more employees.
At the same time, though, CFOs' optimism about the U.S. economy is the lowest it's been in one year, according to a June survey of 186 corporate CFOs by Financial Executives International and Baruch College's Zicklin School of Business. The CFO Optimism Index is now 68.66, down 7 percent from a year ago, FEI reported.
The U.S. Department of Labor's latest figures show 78,000 jobs were created in May, which was about half of what was expected. Smaller firms, however, are more difficult to track.
Dunkelberg told Fortune Small Business, "Manufacturing looks good, construction, which is seasonal, is very strong, and the wholesale trade has had very strong hiring. Big manufacturers aren't hiring, but little ones are."
Michael Alter, president of SurePayroll, which provides online payroll services to small businesses, told Fortune Small Business that while smaller firms are continuing to hire, they are feeling the pinch of rising fuel costs and higher interest rates. “In this environment, small businesses are being squeezed on all sides,” he said. “At the same time, signals about the economy are mixed. Small-business owners don't know whether they should step up and push the accelerator or put on the brakes. They're in pause mode."
SurePayroll conducted a survey of 15,000 customers that shows they added .08 percent more new employees in May compared to April, marking the third months in a row of employment growth. Still, the growth figures, estimated at .7 percent for the entire year, are far below last year's 4 percent payroll growth, the magazine reported.
With the national unemployment rate at 5.1 percent, nearly 25 percent of the smaller firms surveyed in April by NFIB said they couldn't find qualified applicants to fill their positions.
"There are plenty of jobs out there," Dunkelberg said. "The story that there are all these discouraged workers out there is nonsense."