Small businesses added 25,000 jobs during October, according to the ADP National Employment Report released Nov. 2.
Including medium and large businesses, the overall job gain nationally was 239,000.
The jobs gain was 192,000 in September. The biggest gain was in leisure and hospitality, with 210,000 jobs. The biggest loss was in manufacturing jobs, where 20,000 jobs were lost.
“Goods producers, which are sensitive to interest rates, are pulling back and job changers are commanding small pay gains,” said ADP Chief Economist Nela Richardson. “While we’re seeing early sign of Fed-driven destruction, it’s affecting only certain sectors of the labor market.”
Richardson said that the numbers were strong, and an indication of the maturity of US economic recovery.
How Small Businesses Are Affected
Although small businesses overall gained 25,000 jobs, the highest gains were with small businesses with 19 or fewer employees. Small businesses of that size gained 62,000 jobs.
Small businesses of 20-49 employees lost 37,000 jobs. Richardson explained why that is happening. “It’s the competitive environment,” Richardson said. “We’re still seeing a struggle to add jobs.” She added that small business owners overwhelmingly list “finding qualified workers” as their biggest ongoing challenge.
With small businesses of varying size, the larger the business, the larger the problem. “The bigger the firm, the more you have to recoup,” she said. “It’s not just about hiring, it’s about keeping and retaining employees.”
Job Gains by Category
The largest job gains were in leisure and hospitality, with a job growth of 210,000.
“Restaurants, retailers and the travel sector have ramped up in advance of the year end holidays,” Richardson said. “Where we’re seeing job losses are in information services, financial activities, professional services and education and health services.”
Wages for “Job Stayers”
Nationally, job stayers saw a 7.7% pay increase during October.
For small businesses, those with 19 or fewer employees, job stayers saw a 5.6% pay increase. For small businesses with 20-49 employees, job stayers saw a 7.3% pay increase during October.
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The latest Jobs Report shows that small businesses added an extra 25,000 workers in October compared to September. The report also shows that wages rose 7.7%, which is above the rate of inflation, and private payrolls increased by 239,000. That is more than the 195,000 job growth economists in a Wall Street Journal poll had projected. This increase in employment was driven by the travel and leisure industry, which ramps up hiring ahead of the holiday season. The report shows that large establishments shed 4,000 positions while small businesses gained 25,000 positions.