No Shutdown for Small Business The NFIB survey shows another hiring surge in January, and better pay for workers. By James Freeman
https://www.wsj.com/articles/no-shutdown-for-small-business-11548951611
Many political reporters have spent the last six weeks cataloging alleged harms to the economy from the partial government shutdown ended last week. Meanwhile outside of government, America’s small companies were ramping up their historic effort to employ new workers. That’s according to the latest National Federation of Independent Business employment survey, due out later today.
“Job creation was solid in January with a net addition of 0.33 workers per firm (including those making no change in employment), up from 0.25 in December,” reports NFIB Chief Economist William Dunkelberg. He adds that the measurement of January’s job creation among small firms was “the best reading since July.”
While many government workers were sitting at home waiting for taxpayer dollars to start flowing again, business owners were hoping that new job applicants would start showing up at America’s small firms. “Thirty-five percent of all owners reported job openings they could not fill in the current period, down 4 points from December’s record high. Labor markets are still tight,” says Mr. Dunkelberg.
A tight labor market means higher pay for scarce workers. The NFIB economist elaborates:
The percent of business owners reporting that they increased employee compensation continued at 45 year record high levels. Thirty-six percent reported higher compensation in January, up 1 point from December and one point below September’s record high. Twenty percent planned increases in the next few months (down 4 points), predicting further gains in wages and benefits.
This welcome news that the small business economy continued to hum while parts of the government came to a halt doesn’t mean there are no clouds on the horizon. While hiring plans were still positive in January, they were less robust than in the prior period. Says Mr. Dunkelberg:
A seasonally-adjusted net 18 percent plan to create new jobs, down 5 points from December’s reading. Not seasonally adjusted, 23 percent plan to increase total employment at their firm, and 3 percent plan reductions. Job creation plans were strongest in construction (net 32 percent), and manufacturing (net 26 percent).
He adds that owners of small firms aren’t expecting much of an economic slowdown this year though he believes growth in 2019 will likely be less rapid than last year due in part to the continuing worker shortage across the U.S. economy. CONTINUE AT SITE
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