Small businesses maintain strong pace of hiring, borrowing to start the year

Small business owners continued their strong pace of hiring in January, adding 75,000 jobs. (KEVIN LAMARQUE/REUTERS)

The nation’s smallest companies cranked up their pace of hiring and lending in the final months of the year — and they are showing few signs of letting up at the start of 2014.

Small businesses added a healthy 75,000 jobs in January, according to a report released Tuesday by payroll processing firm ADP. While that’s down from the 100,000-plus added in November and December, it extends a healthy pace of hiring over the past six months, during which small-business employment has not increased by less than 75,000.

It was the smallest of small employers, ones with fewer than 20 employees, who again led the way, adding 42,000 positions last month, while companies with between 20 and 50 workers added the remaining 33,000 employees. Service-producing firms also added far more jobs than those that produce goods.

Overall, the economy added 175,000 jobs in January, according to the report, which is based on payroll information from more than 400,000 companies.

Carlos Rodriguez, ADP’s president and chief executive, noted in the report that the readings are “in line with the average monthly growth throughout 2013. Still, they could have been higher, some say, but were held in check by brutal winter storms that hobbled many businesses across the country this past month.

“Cold and stormy winter weather continued to weigh on the job numbers” Mark Zandi, chief economist of Moody’s Analytics, said in a statement. “Underlying job growth, abstracting from the weather, remains sturdy.”

Another report released Wednesday by Wells Fargo suggests small companies are not likely to pull back on the reins anytime soon. More than one in five employers (22 percent) now plan to increase hiring in the coming year, up from 16 percent in the bank’s final quarterly survey of last year, which is based on responses from more than 600 business owners and has a margin of error of four points.

In addition, the number of small business owners expecting higher revenues and better cash flow in the coming months also ticked up this past quarter, helping push Wells Fargo’s overall small-business optimism index to its highest level since the recession began in 2008.

A day earlier, Thomson Reuters and PayNet reported that their monthly small business lending index for December jumped 6 percent over November and 5 percent over the same time last year, signaling credit is also getting easier to come by on Main Street.

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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