Small Businesses Add 204,000 Jobs to US Economy

Small businesses experienced strong job growth during December 2021, according to the latest ADP Small Business jobs report.

During December small businesses (fewer than 50 employees) saw an increase of 204,000 jobs. The previous month, the small business job increase was 115,000 jobs.

Service providing jobs were the bulk of the small business growth at 185,000. Businesses of 1-19 employees saw an increase of 96,000 jobs while those with 20-29 grew by 89,000 jobs.

Goods producing jobs for small businesses grew by 19,000 (8,000 very small and 11,000 small).

Franchise jobs increased by 39,400, compared to 35,300 the previous month.

Small Businesses Add 204,000 Jobs

ADP chief economist Nela Richardson pointed out that December’s strong growth occurred as the impact from the Delta variant lessened and Omicron poised on the horizon.

“December’s job market strengthened as the fallout from the Delta variant faded and Omicron’s impact had yet to be seen,” Richardson said. “Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth.”

Overall, job growth was 807,000 jobs in December, up from an increase of 505,000 jobs during November.

“December’s job growth brought the fourth quarter average to 625,000, surpassing the 514,000 (jobs) average for the year,” Richardson said. “While job gains eclipsed 6 million in 2021, private sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels.”

In her “Main Street” business blog post last week, Richardson predicted trends in interest rates and jobs.

Interest Rates

“Federal governors decided to begin closing the spigot – slowly – on the easy money that’s been flowing into the economy since the pandemic began. They also indicated that they’re likely to raise interest rates next year. What we don’t know is exactly when the Fed will start pushing up rates, how high they’ll go, and whether costlier borrowing – think small business loans, credit cards and mortgages  – will hurt Main Street.”

Jobs and Employment Trends

“Demand for workers has never been greater. Job openings have surged to record highs. On the face of it, there are more openings than there are people looking for work.  With demand roaring back we’ve gone from asking “Where are the jobs,” to “Where are the workers? And when will they come back?”

“Structural” Barriers Faced by Employees and Employers

“Building equity into compensation has long term effects. We now also recognize another element critical to the equity equation — structural support, such as affordable daycare, that can empower job seekers. In 2022, employers will need to decide whether to prioritize pay equity and social infrastructure for their workers.”

 

Image: ADP

This article, "Small Businesses Add 204,000 Jobs to US Economy" was first published on Small Business Trends