Small businesses expanded at a slightly faster clip last month. However, compared to this summer, autumn appears to have brought with it a cooldown in hiring on Main Street, mirroring a trend across the broader economy.
Small companies added 88,000 jobs in September, up from an upwardly revised 82,000 the month before, according to the latest data released by payroll services firm ADP. That’s a good sign for the economy, as the small-business sector, generally considered a reliable source of economic growth, was coming off back-to-back months of slowdown.
Companies of all sizes added 213,000 positions last month, marking a similar reversal after two straight months of shrinking job gains.
“It’s a positive sign for the economy to see the 200,000-plus trend continue,” Carlos Rodriguez, president and chief executive of ADP, said in a statement.
Still, the numbers are down considerably from their peaks in July, when the economy added a total of 297,000 jobs, 133,000 of which were generated by small businesses (considered by ADP to be those with fewer than 50 workers).
Within the small-business sector, it’s the smallest of firms that continue to contribute the most new jobs. Companies with fewer than 20 workers added more than 48,000 positions in September, compared to more than 39,000 added by businesses with between 20 and 50 workers.
Goods-producing small businesses, meanwhile, continue to show slow growth, adding only 6,000 jobs last month, their lowest monthly output since January. Over the past few years, nearly all of the jobs added by companies with 50 or fewer workers have come from service-producing businesses.
Another small-business hiring index from payroll firm Paychex and information services company IHS shows a similar slowdown, with the pace of growth still heading in a positive direction, but at a slower pace than the month before.
“Though still performing stronger than in 2013, the small business job market has cooled a bit in the second half of 2014,” James Diffley, IHS’s chief regional economist, wrote in the groups’ report.