Small businesses deliver a much-needed economic jolt, add 74,000 jobs in September


Small businesses added 74,000 jobs in September, more than any other size group, according to ADP. (Hans Pennink/AP)
October 4, 2013

The nation’s smallest employers posted the largest number of job gains last month, according to a new hiring survey, providing much-needed fuel for an economic recovery that continues to sputter.

Small employers, those with fewer than 50 workers, added 74,000 jobs in September, up from 71,000 in August, according to the new ADP National Employment Report, which typically precedes the government figures released each month by the Labor Department. Due to the current government shutdown, however, the agency did not release its numbers as scheduled on Friday.

More specifically, it was actually the smallest of the country’s small businesses, those with fewer than 20 employees, that punched well above their weight, adding 46,000 workers since August.

During the same period, mid-sized firms (50-499 workers) contributed 28,000 jobs and large companies (500 or more workers) added 64,000, for a total of 166,000 employees added in September. However, ADP revised downwards its previous estimate for August from 176,000 to 159,000.

“While job growth has slowed, there remains a general resilience in the market,” Mark Zandi, chief economist of Moody’s Analytics, which helps generate the report, said in a statement. “Job creation continues to be consistent with a slowly declining unemployment rate.”

Once again, it was service-providing firms, as opposed to those producing goods, that continued to buoy the economy last month, adding 147,000 jobs compared to 19,000 added by goods-producing businesses. Nearly half of those services-sector workers were hired by small businesses.

Released the same day, the National Federation of Independent Business’s small-business employment index was not nearly as rosy for September.

The group’s polling numbers show that roughly same number of small firms added workers as subtracted workers. However, those trimming down did so at a faster clip during the course of the month. In all, business owners dropped an average of 0.1 worker per company, according to the NFIB.

“Owners are reporting sub-par levels of hiring, so job growth remains anemic even with low levels of initial unemployment claims,” NFIB Chief Economist Bill Dunkelberg wrote in the report.

Some small business groups are also concerned that a prolonged government shutdown, which began Monday, could start to take a toll on Main Street. The Small Business Administration, for example, cannot process new loan applications, and some are worried that private firms could lose business from federal workers, most of whom are currently furloughed.

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.
Comments
Show Comments

Sign up for Today's Headlines

Start every morning with the most important stories.

Most Read Business