Small businesses in the United States added 71,000 jobs in August, according to a monthly report from payroll processor ADP. The continued growth suggests private employers have yet to be sidetracked by government and economic uncertainties, analysts say.
Of the 71,000 small business jobs, 56 percent — about 40,000 — were added in companies with less than 19 employees. The remaining 31,000 were added in businesses with between 20 and 49 employees.
Significantly more small business jobs were added in the service sector than those that produce goods, with 69,000 and 1,000 added respectively.
August small business jobs showed a slight drop from July, which added 82,000 small business jobs. June added 84,000, and 58,000 in May.
The private sector added 176,000 jobs in total, including about 74,000 from medium businesses with between 50 and 499 employees and 32,000 in large businesses. Overall private sector job creation showed a similar drop — 200,000 private sector jobs were created in July, according to ADP.
“Job gains in August were consistent with increases experienced over the past two-plus years. There is little evidence that fiscal austerity and Health Care Reform have had a significant impact on the job market,” Mark Zandi, chief economist at Moody’s Analytics, said in the ADP report.
Americans seeking unemployment benefits dropped to 328,500, its lowest level since October 2007, data from the Labor Department showed.
Small business job creation is likely a sign of increased consumer spending, Stephen Fuller, director of George Mason University’s Center for Regional Analysis, said in an interview.
“If you look at where small businesses are, and what kind of sectors they’re in...most of these jobs are local serving jobs. They serve the residential economy, concentrated in retail and consumer services, and also in health,” Fuller said.
“If you’re an optimist this is a good story, but there is a shadow that comes across this landscape — uncertainty with federal budget, and the stock market. Even though these small guys aren’t in the stock market, they hear it.”
Uncertainty caused by factors like the Federal Reserve Bank’s decision on when it ends its stimulus efforts and the start of Obamacare could lead to a slowdown in hiring in future jobs reports, he added.