Small Business: a Leading Indicator for the Economy?

On October 7th, I reported that unemployment figures from the government did not always reflect hiring by small and entrepreneurial businesses. Here’s more on that subject.

This conclusion was reported by Haseeb Ahmed in an article in early September. Mr. Ahmed believes that that government employment figures fail to fully capture new hiring activity of small businesses. Why? Because small businesses are usually the first to begin hiring during an overall upturn in the economy.

In fact, he believes that we will see the employment numbers retroactively revised later on to capture job gains that existed but were not captured in the initial data. Per Mr. Ahmed, something similar happened in the early 1990’s recession recovery cycle, when job gains were retroactively revised upward by 1.5 million jobs.

According to the Small Business Survival Committee, a non-partisan policy group for small businesses and entrepreneurs, official Washington sometimes misses the importance of small business and entrepreneurs in the economy. Reporting of employment figures may be one example.

Anita Campbell Anita Campbell is the Founder, CEO and Publisher of Small Business Trends and has been following trends in small businesses since 2003. She is the owner of BizSugar, a social media site for small businesses.