Small business hires dip in May, but 2016 trend still steady

SLOW MONTH, STEADY TREND: Small businesses added 76,000 jobs in May, down from 101,000 in April, but are holding to a relatively steady hiring trend this year, according to a report released Thursday by ADP. The payroll company, which tracks job trends at its corporate customers, found small businesses have added an average of about 84,000 positions a month since Jan. 1

WHAT IT MEANS: Small business owners remain somewhat cautious about taking risks like hiring because economic growth is weak; the gross domestic product rose at an annual rate of just 0.8 per cent in the first quarter. The employment report was in line with surveys taken in the past few months that showed owners were willing to hire, but aren’t adding jobs aggressively because of their concerns about the economy and their revenue.

Small business employment has followed the pace of companies in general. ADP’s small business customers added an average of more than 100,000 jobs in the first half of 2015. But their job creation also has been relatively stable this year after dropping from a gain of 152,000 jobs last June to just 36,000 in September.

WHAT’S UP NEXT: The Labor Department’s May employment report is due Friday. Although the report doesn’t break out job growth numbers by company size, it still gives an indication of what small businesses are doing. The advocacy group National Federation of Independent Business will also release its monthly employment report, based on a survey of its members.