The Washington Post

Small business hiring surges to fastest pace since early 2012

FILE - In this May 16, 2014 file photo, shoppers walk past a now hiring sign at a Ross store in North Miami Beach, Florida. (Uncredited/AP)

Now that’s more like it.

Small businesses nationally added 117,000 jobs in June, a 60 percent increase over their average for the first five months of the year and the fastest pace of hiring since early 2012, according to the latest numbers published Thursday by payroll processing firm ADP.

More than the companies in any other size category, those small firms pushed the overall job numbers last month to 281,000, the highest mark since fall 2012. Construction, transportation and professional services sectors posted the steepest gains.

“The job market is steadily improving,” Mark Zandi, chief economist for Moody’s Analytics, said in the report, noting that the gains were “broad based across all industries and company sizes.”

Still, it’s a particularly important rebound for the county’s smallest employers, who are often lauded as the most steady job creators but hadn’t cracked six-digits in monthly job gains since November. In addition, June was the second straight month that small companies have contributed more than 40 percent of all jobs created — a mark they fell shy of during the first four months of the year.

Moreover, if you extend the definition of “small business” from ADP’s metric (fewer than 50 workers) to the one often used by the federal government (fewer than 500 workers), those companies were responsible for 83 percent of the total job gains last month.

ADP’s readings mirror those from two other closely-watched indices.

The National Federation of Independent Business reported Thursday that small businesses added an average of 0.05 workers per company in June. It’s the ninth consecutive month of gains, extending the longest positive streak since 2006.

Perhaps more importantly, the number of owners who plan to increase employment in the months ahead continued to increase and is now “approaching normal levels for a growing economy,” according to NFIB Chief Economist Bill Dunkelberg.

“This signals that the jobs numbers will be solid and the unemployment rate will fall,” Dunkelberg added in the report.

Meanwhile, the latest report from payroll firm Paychex showed that its small-business employment index increased 0.23 percent, hovering near a record high. James Diffley, chief regional economist at IHS, pointed to the number as yet more evidence “that payroll conditions have clearly improved this year for the country’s small businesses.”

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 runs the On Small Business blog.



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