Harsh winter weather has put a chill on small business hiring


Small-business hiring on the East Coast has been particularly slow these last two months, according to a new report. (Autumn Parry/AP)

Some exceptionally harsh winter weather has put a chill on hiring at small businesses the last two months, ending a streak of strong job gains, according to new economic indicators.

Nationwide, small companies added a mere 59,000 jobs in February, barely half the totals posted in November and December in the monthly employment reports from payroll processing firm ADP. Meanwhile, researchers lowered their initial small-business hiring estimates for January from 75,000 jobs down to 52,000.

Medium-size (50-500 employees) and large (500 plus employees) businesses didn’t fare any better last month, adding 35,000 and 44,000 jobs, respectively. That brings the total job growth by private firms to 139,000, up slightly from a newly revised-down 127,000 and well off the pace from the second half of last year, when employers added at least 190,000 positions every month.

So, why the sudden decline? Some analysts are pointing fingers at Mother Nature.

“Bad winter weather, especially in mid-month, weighed on payrolls,” Mark Zandi, chief economist of Moody’s Analytics, said in a statement Wednesday. “Job growth is expected to improve with warmer temperatures.”

A new hiring report by Intuit, another payroll services company, backs up ADP’s findings. After adding 10,000 jobs in January, companies with fewer than 20 employees reported no net job growth last month, according to the index, which is based on payroll data from more than 200,000 small businesses across the country.

Susan Woodward, an economist who works with Intuit to produce the index, put much of the blame on the weather, too.

“By region, the Midwest and the East Coast saw the most employment declines, possibly due to the extreme winter,” Woodward wrote in the report.

She added an unseasonably warm and snowless winter in Idaho — where skiing is big business — led that state’s small companies to post the nation’s only declines in hours worked and compensation last month.

In short, Mother Nature seems to have found a myriad of ways to mess with small businesses here at the start of the year.

Follow J.D. Harrison and On Small Business on Twitter.

J.D. Harrison covers startups, small business and entrepreneurship, with a focus on public policy, and he manages the Post's On Small Business blog.
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