CBIZ’s small business employment index reported a slight decline in hiring to close out the second quarter
Cleveland, July 9, 2024–(COMMERCIAL CABLE)–CBIZ’s Small Business Employment Index (“SBEI”) reported a seasonally adjusted decrease of 0.08% in June, a month that typically sees positive hiring momentum due to seasonal trends. CBIZ’s SBEI tracks payroll and hiring trends for more than 2,900 companies that have 300 or fewer employees, providing a broad view of small business trends.
The Bureau of Labor Statistics’ employment report indicated hiring growth that met expectations. The June reading showed an overall increase of 206,000 private-sector jobs. The national unemployment rate rose slightly to 4.1%. The report includes all nonfarm private employers at businesses of all sizes. Similarly, the ADP employment report indicated hiring growth among small, medium, and large businesses. Its June reading showed an overall increase of 150,000 private-sector jobs for the month. Small businesses accounted for an increase of 5,000 jobs on a seasonally adjusted, month-over-month basis. The ADP report counts small businesses as businesses with 49 or fewer employees, while the CBIZ SBEI uses data from businesses with 300 or fewer employees.
“There is a lot of economic data that points to a cooling labor market,” said Anna Rathbun, CFA, chief investment officer at CBIZ Investment Advisory Services, LLC. “The Bureau of Labor Statistics’ June labor market update continued the trend of weakness amid strong increases in nonfarm payrolls and downward revisions to employment gains from prior months. If this trend continues, it will likely help the Federal Reserve’s decision to cut interest rates; however, for small businesses and job seekers, this leads to a period of uncertainty.”
Regionally, both the Central region (0.67%) and the Northeast region (0.25%) experienced an increase in hiring. The Western region (-1.89%) recorded the largest decrease in hiring, followed by the Southeast region (-1.27%).
At the industry level, administrative and support services, retail trade, and technology and life sciences saw the largest increases in hiring. Accommodation and food services, arts, entertainment and recreation, and nonprofit organizations reported job losses.
Rathbun added, “June is typically a positive month for job creation as the summer season is in full swing, but there were some challenges that were not characteristic of the season. Typically, we expect healthy job creation in food services in the summer, but this was the sector that was hit the hardest. It was also surprising to see challenges in the arts, entertainment and recreation industry during the month of June. The weakness in the service industry was corroborated in the BLS jobs report for June, which saw accommodation and food services lose 2,400 jobs.”
To view an infographic with employment index data, visit the CBIZ website.
Other findings from the June SBEI include:
June Snapshot: 19% of the companies in the index increased their workforce, 60% made no changes to their workforce and 21% reduced the total number of jobs.
Industries at a glance: Administrative and support services, retail trade, and technology and life sciences all saw increases in hiring. Declines were seen in accommodation and food services, arts, entertainment and recreation, and nonprofit organizations.
Geographical contracting: The Central (0.67%) and Northeast (0.25%) regions reported hiring increases, while the West (-1.89%) and Southeast (-1.27%) regions reported hiring decreases.
Whats Next? How the rest of the summer will play out for businesses that represent the hallmark of summer activities, such as travel and leisure, remains to be seen. Whether this trend will continue into July and August or whether June was an anomaly remains to be determined.
Editor’s note:
(1) The SBEI illustration is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License. Based on our work on https://www.cbiz.com.
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About CBIZ
CBIZ is a leading provider of financial, insurance and advisory services to businesses throughout the United States. Financial services include accounting, tax, government healthcare consulting, transaction advisory, risk advisory and valuation services. Insurance services include employee benefits consulting, retirement plan consulting, property and casualty insurance, payroll and human capital consulting. With over 120 offices in 32 states, CBIZ is one of the largest insurance brokerage and accounting service providers in the U.S. For more information, visit https://www.cbiz.com.
The original version of this release was posted on businesswire.com: https://www.businesswire.com/news/home/20240709998344/en/
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