Small business hiring blips up, extending erratic streak

ZIGZAG CONTINUES: Small business hiring blipped higher in June, with companies adding 95,000 jobs, according to ADP, the payroll processing company. That was a gain of 19,000 jobs from May’s 76,000, which in turn was a drop from April’s 93,000 new positions. ADP uses data provided by its small business customers, those with up to 49 employees, to compile its report.

THE BIGGER PICTURE: Hiring at ADP’s small business customers has fluctuated since the beginning of the year, with back-to-back gains occurring only in March and April. Hiring also remains below the pace of 100,000 new jobs that companies averaged monthly in the first half of 2015. The uneven economy has many owners sticking to the conservative strategy they adopted during the recession; owners have said in surveys they won’t hire until they have enough new revenue to justify expanding their staffs.

Small business and the economy are in a vicious circle of sorts — economists say small business hiring must gain momentum for the economy to step up its recovery. But many owners, seeing weak growth like the 1.1 per cent annual increase in the gross domestic product in the first three months of the year, have little incentive to hire. Some companies are also uneasy about the possibility of economic fallout from the British vote to leave the European Union.

WHAT’S NEXT: The Labor Department’s report Friday on hiring by companies of all sizes will give some more clues as to what small business owners are doing, although it doesn’t break out job gains by company size.