Small Businesses Add 63,000 Jobs in July

The ADP Report has released numbers that small businesses have hired 63,000 new staff in July 2020. In June small businesses alone had absorbed a combined 937,000 new hires showing a slowdown in new hires.

The ADP Small Business Report for July, reports businesses employing between 1-19  employees hired 45,000 people in July. Those who employ between 20-49 employees have also added 18,000 new hires.

The ADP classifies businesses employing up to 19 employees as ‘very small businesses.’ While those who employ between 20-49 employees as ‘other small businesses’. ADP Small Business Report uses ADP’s payroll data representing 460,000 businesses and nearly 26 million workers nationwide.

July 2020 ADP Small Business Report

Those in the service sector fared better in July grossing around 72,000 new hires. Firms employing between 1-19 employees hired 51,000 new workers. Businesses that produced goods fared badly with small businesses, losing a combined 9,000 workers in July.

July also saw mid-sized businesses (50-499 employees) losing some 25,000 jobs. Across the board and company sizes businesses in trade, transportation and utilities were affected the most in July. The sector lost a combined 41,000 jobs. The financial sector also took a hit losing 18,000 jobs.

Companies with more than 500 employees hired 129,000 new workers in July.

Who Fared Well in July

The report on national employment shows a slowing down in the job market recovery. A total of 167,000 new jobs were added to the US economy in July. A not so encouraging figure if compared to the figures in June. In June, the economy had seen 2.3 million new hires, that figure has since then been revised to 4.3 million.

The service sector alone hired 166,000 of these new jobs. Professional services and health/fitness also saw strong growths with 58,000 and 46,000 new hires respectively in July. Jobs in the financial sector are still looking to recover as the sector lost 18,000 jobs. In June it saw 65,000 new jobs. This is also the case for the information services industry as it continues to lose jobs. In July it lost 3,000 jobs which is a significant improvement from June’s figures where it had lost 50,000 jobs.

The goods-producing sector saw modest growth with only 10,000 new jobs across all business sizes. Natural resources extractions/mining and construction also saw setbacks losing 10,000 and 8,000 jobs respectively. Natural resources extractions/mining continue hemorrhaging jobs. In June it had lost another 26,000 jobs.

ADP National Franchise Report – July 2020

Franchise businesses have seen encouraging growth in new hires as businesses opened up in July. In fact, July saw growth by almost three-quarters (21,200) of the growth seen in June (4,500).

restaurants and car dealerships spearheaded the positive growth in July adding a combined gross of new workforce totaling 31,000. Food retailers, business services, accommodations and real estate had seen an aggregate loss of 7,100 jobs.

The increase in job growth from the previous month does come with a cautionary tale. Even though job losses from accommodation have dropped from 5,400 to 600 in July food retailers, business services, accommodations and real estate continue to grapple on how to make a comeback. Due to a combination of uncertainty and health concerns their growth remains inhibited to absorb additional manpower.

Bottom Line

July’s figure indicates cautious optimism in regards to the job market among small businesses. April and May had shown gloomy figures with job losses registering 6 million and 43,500 respectively. At the peak of the pandemic in April, the nation saw an excess of 20 million job losses.

July also saw nonfarm payroll employment rising by 1.8 million with the unemployment falling by 10.2%. The number of workers who usually work part-time also rose by 803,000 to 24.0 million. The number of unemployed who were on temporary layoff decreased by 1.3 million in July to 9.2 million.

This is by about half its April level. The Bureau for Labor statistics attributes the improvement in the labor market to the resumption of economic activity curtailed by COVID-19.

In July, the Bureau reports of notable job gains occurred in leisure and hospitality, government, retail trade, professional and business services, other services, and health care. July also saw the number of unemployed Americans falling by 1.4 million to 16.3 million.

Image: ADP

Samson Haileyesus Samson Haileyesus is a staff writer for Small Business Trends and has been a member of the team for 5 years. He has several years of progressive experience in media, communication and PR working with government, NGOs and private sector.