Seasonal Hiring Decline Highlights a Weakness in Labor Market
NOV 9, 2022 - 7:11 am
The CBIZ Small Business Employment Index (SBEI) reported a seasonally adjusted decrease of 1.94% in October. The reading highlighted the emerging weakness in the labor market and showed a decline in hiring for the third-straight month. The CBIZ SBEI tracks payroll and hiring trends for over 3,600 companies that have 300 or fewer employees, providing broad insight into small business trends.
“The expectation of a recession is beginning to materialize in the labor market,” Anna Rathbun, CFA, chief investment officer at CBIZ Retirement & Investment Solutions, said. “There have been some discrepancies in the data for the last several months, with the nonfarm payroll showing strength while the household survey has shown weaker nuances, pointing to uncertainty among businesses.”
The ADP employment report showed hiring growth among small, medium-sized and large companies and its October reading showed an overall increase of 239,000 private-sector jobs for the month. Small businesses accounted for a slight increase of 25,000 of those jobs 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.
The CBIZ SBEI data reported a 1.85% increase in hiring for the Western region for the second straight month, but the other regions across the U.S. experienced significant declines. The Southeast reported the largest decrease of -2.61%, followed by the Northeast’s -2.56% and Central regions’ -2.22%.
The most notable hiring increases in the industry were seen in management, mining, not-for-profit, and wholesale distribution. fishing & hunting, information technology, leisure and hospitality and life sciences all experienced declines in hiring.
“The data suggests hiring will be challenged by the negative headwinds impacting the economy and a pain point for small businesses as they begin to brace for a potential recession,” Rathburn said.
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