NFIB: Small business labor and demand continues to grow

Written on Nov 09, 2018

A seasonally adjusted 16% of small business owners reported increasing employment an average of 3.3 workers per firm and 11% reported reducing employment an average of 2.9 workers per firm, according to NFIB’s monthly jobs report, released last week. Job creation remained solid in October for small businesses at a net addition of 0.15 workers per firm.

“As we’ve seen for months, small business owners continue to be large job creators for Americans in today’s economy,” said NFIB President and CEO Juanita Duggan. “Instead of worrying about costly regulations and high taxes, finding workers to sustain growth is the top concern.”

A seasonally-adjusted net 22% of owners plan to create new jobs, four points below August’s record high, but still exceptionally strong historically. Twenty-two percent plan to increase total employment at their firm, and 6% plan reductions.

However, 38% of all owners reported job openings they could not fill in the current period, equal to September’s record high. Sixty percent of owners reported hiring or trying to hire, with 88% of them reporting few or no qualified applicants for the positions they were trying to fill. When asked their ‘Single Most Important Business Problem,’ 23% of owners cited the difficulty of finding qualified workers in October, down two points from the August record high.

“The labor force is not growing quickly enough to satisfy the demand,” said NFIB Chief Economist Bill Dunkelberg. “The unemployment rate is expected to be lower which means that the increase in labor force participation will not be sufficient to meet new labor demands.”

October again showed there are more job openings than job seekers, which is pushing up compensation. A net 34% reported raising overall compensation in hopes of hiring and retaining employees, down three points from September’s record high. Unchanged from last month, 14% of owners reported using temporary workers.

The labor market is tight for both skilled and unskilled workers, with 34% of owners reporting openings for skilled workers and 16% reporting openings for unskilled labor.

Click here to view the entire NFIB Jobs Report.

The full Small Business Economic Trends report will be released Nov. 13.

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