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The CBIZ Small Business Employment Index reported an increase in employment in December, indicating positive sentiment from small business owners.
Cleveland, January 10, 2023-(BUSINESS WIRE)–The CBIZ Small Business Employment Index (“SBEI”) showed a seasonally adjusted increase of 0.84% in December. The earlier downward trend in employment reversed in November and December, which bodes well for small business owners heading into the new year. CBIZ SBEI tracks payroll and hiring trends for more than 3,500 companies with 300 or fewer employees, providing a broad understanding of small business activity.
“From a seasonal perspective, December employment data was weaker than expected,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Investment Advisory Services, LLC. “December typically sees seasonal hiring due to the holiday season, and the pace of hiring this month was slower than expected for this year. However, this data is consistent with worse-than-expected holiday sales in the retail sector, and consistent with the overall recessionary narrative.”
The Bureau of Labor Statistics’ employment report indicated employment growth that exceeded expectations. The December reading showed a total increase of 223,000 private sector jobs. Despite overall employment growth, the national unemployment rate remained steady and fell slightly to 3.5 percent. The report covers all non-farm private employers of all sizes. Meanwhile, ADP’s employment report showed a total increase of 235,000 private sector jobs for the month. Small businesses added 195,000 on a seasonally adjusted, month-over-month basis. The ADP report counts small businesses as companies with 49 or fewer employees, while the CBIZ SBEI uses data from companies with 300 employees or fewer.
CBIZ SBEI regional data showed employment growth in all regions of the United States in December. The West (1.25%) reported the highest increase in employment, followed by the Central (1.18%), Southeast (0.35%) and Northeast (0.18%) regions.
In terms of industry, the most notable employment increases were seen in healthcare, nonprofit and wholesale. Arts, entertainment and leisure, technology and life sciences, and utilities all experienced declines in hiring.
“After nearly two years of labor shortages, small business owners may have an easier time in the coming months,” Rathbun added. “The downturn in sentiment may give employers a better chance to run their businesses properly because employees are less likely to quit.”
Visit the CBIZ website to view information along with employment information.
Additional entry points from the December SBEI include:
December Snapshot: In the index, 24% of companies increased their workforce, 57% made no change to their headcount and 19% saw a reduction in overall employment.
Industries at a Glance: Healthcare, nonprofits and wholesalers saw hiring gains. There were declines in arts, entertainment and recreation, technology and life sciences, and utilities.
Geographic recruitment; The Western (1.25%), Central (1.18%), Southeast (0.35%) and Northeast (0.18%) regions all experienced increases in employment.
What’s next? Small business hiring showed modest growth after reversing the downward trend seen in previous months. However, with current hiring showing signs of weakening, the pace could change in 2023 as fears of a recession persist.
Editor’s Note:
(1) The SBEI diagram is licensed under a Creative Commons Attribution-NoDerivs 3.0 Unported License. Based on our work at https://www.cbiz.com.
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About CBIZ
CBIZ, Inc. It is a provider of financial, insurance and consulting services to businesses throughout the United States. Financial services include accounting, tax, government health care consulting, marketing consulting, risk consulting and valuation services. Insurance services include employee benefits consulting, retirement planning consulting, property and casualty insurance, payroll and human capital consulting. With more than 100 company offices in 32 states, CBIZ is one of the largest providers of accounting and insurance brokerage services in the U.S. For more information, visit www.cbiz.com.
Check out the source version at businesswire.com: https://www.businesswire.com/news/home/20230110005221/am/
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