Small businesses continue to fall short of their billing as the nation’s most prolific job creators, and the latest reports provide no reason to expect hiring to pick up anytime soon.
In the month since the general election, which many economists had hoped would alleviate some of the uncertainty they believed was restraining job growth, small employers have instead pulled back further on their already bleak hiring plans. In fact, a new Gallup poll shows that small business owners expect to add fewer new jobs in the coming year than they have at any point since the depths of the recession in late 2008.
That could spell trouble for the broader economy, as researchers note that previous low was immediately “followed by massive layoffs” in the first few months of 2009.
“While a repeat of that experience seems unlikely in 2013, there is the potential for a serious decline in jobs early next year if small business owners’ hiring intentions do not improve,” Dennis Jacobe, Gallup’s Chief Economist, said in the report.
More than one out five business owners (21 percent) plan to have a smaller payroll this time next year, exceeding the portion planning to increase employment (17 percent) for the first time since the summer of 2010, according to the poll.
But the downturn may already be kicking in, according to the latest monthly indicators. The National Federation of Independent Business reported a slight decline in small business hiring in November, as did SurePayroll, which collects payroll data from more than 40,000 small firms.
The lone bright spot among the reports came from ADP, whose figures showed small business payrolls increased last month by 19,000 -- but even that was down considerably from the 52,000 jobs they added in October.
Most researchers noted that the November numbers were skewed lower by Superstorm Sandy, as businesses along the East Coast were forced to close, many of which have yet to complete repairs or reopen. However, the consensus remains that the broader economic turmoil, namely the heightening sense of uncertainty surrounding the fiscal cliff, is continuing to discourage business owners from investing in new employees.