NFIB Jobs Statement: A Weak Report from Small Business

Chief economist for the National Federation of Independent Business (NFIB) William C. Dunkelberg, issued the following statement on the June job numbers, based on NFIB’s monthly economic survey that will be released on Tuesday, July 9, 2013. The survey was conducted in June and reflects the responses of 662 sampled NFIB members:

“Small firms are continuing to shrink as small employers in June reported an average gain of negative 0.09 workers per firm-essentially zero. We only have to look to Washington for reasons why our economy can’t seem to maintain steam and is on a painfully slow journey towards job creation.

“Eleven percent of the owners surveyed by NFIB (up 2 points) reported adding an average of 3.6 workers per firm over the past few months. Offsetting that, 12 percent reduced employment (unchanged) an average of 4.3 workers (seasonally adjusted), producing a seasonally adjusted gain of negative 0.09 workers per firm overall.  The remaining 77 percent of owners made no net change in employment.  Fifty-three percent of the owners hired or tried to hire in the last three months and 41 percent (77 percent of those trying to hire or hiring) reported few or no qualified applicants for open positions. While a higher percentage of the owners hired, those who reduced employment made cuts large enough to put employment growth among existing firms in the red.

“Nineteen (19) percent of all owners reported job openings they could not fill in the current period (unchanged) and 12 percent reported using temporary workers, little changed over the past 10 years. The health care law provides incentives to increase the use of temporary and part-time workers, but this indicator has not registered a trend toward the use of more temps.

“Job creation plans rose 2 points to a net 7 percent planning to increase total employment, better, but still a weak reading. Not seasonally adjusted, 14 percent plan to increase employment at their firm (down 2 points), and 6 percent plan reductions (up 1 point).  

“Uncertainty about the health care law continues to have a negative impact on small business. Small employers are still trying to figure out what labor will cost and what firm size will have to comply with which rules. As long as Washington is continues to create rolling disasters- exemptions, special deals, delays, confusion, contradictory regulations, small businesses will not be ready to bet on their future by hiring lots of workers with uncertain cost.”