Both presidential candidates, vice presidential candidates, and nearly every other politician on the campaign trail have at some point trumpeted the vast number of jobs small businesses create for American workers.
But do they really? Not lately.
Small businesses created “essentially zero” jobs in August, according to the latest report from the National Federation of Independent Business, continuing an exceptionally sluggish year on the hiring front for the country’s smallest firms. On average, the number of workers dropped a minuscule 0.05 per company during the month, a slight dip from the readings in July, further suggesting that employers are hesitant to expand their payrolls amid the uncertainty of a closely contested election.
“Any serious job creation this year will have to come from large firms or new small firms created to meet the needs of millions of new consumers due to population growth,” NFIB Chief Economist William Dunkelberg said in a statement. “But existing small businesses are unlikely to expand before the election.”
On the one bright note, without seasonal adjustments, the number of respondents who reported plans to increase employment ticked up 2 points to 13 percent, while the number anticipating staff reductions remained unchanged. On the other hand, making matters more frustrating is that, while nearly half of small businesses hired or tried to hire new workers over the past three months, more than a third of them said they had trouble finding qualified applicants for their open positions.
On Friday, the Labor Department piled on ever more bleak news, reporting that the economy added only 96,000 jobs last month and cutting back on previous estimates for June and July. The unemployment rate slipped from 8.3 percent to 8.1 percent, but mostly because job seekers are calling off their searches, not finding employment.
The discouraging numbers from small businesses, a sector President Obama has been counting on to help fuel the recovery, may further bleaken his chances come November, Dunkelberg said.
“Unfortunately for this administration, small-business job growth will most likely still be hovering around zero for the coming months,” he predicted. “Not a good place to be when seeking re-election.”