According to the Census Bureau, small businesses employ more than half of all workers in the United States, which is why small business hiring is watched closely as a bellwether of the overall economy. So is small business hiring strengthening, or weakening? It depends on who you ask.
ADP, a firm that provides payroll services for companies employing more than 650,000 workers, says small-business hiring was “a little stronger” this past month. According to an Associated Press report last week, ADP said companies with less than 49 employees added 68,000 jobs in February, an improvement from 63,000 in January. All companies in ADP’s monthly study showed a “healthy gain” of 235,000 jobs with “significant increases in construction, hotels and restaurants, and education and health care.”
However, ADP’s biggest competitor Paychex wasn’t as bullish. Paychex — which processes payroll for about 605,000 employees at their clients — reported small declines in jobs and wage growth in February. Its monthly Small Business Jobs Index is actually down one percent from a year ago. More concerning, weekly earnings growth is also slipping.
The good news is that both companies are reporting a growth in hiring, not declines. But why the difference in the rate of growth? No one really knows. It could be slight variances between the two companies’ data sets, but given the amount of data analyzed and the strict methodologies used over many years producing these reports I don’t give that much weight.
