This past December, small businesses reportedly created 55,000 positions. They also increased working hours for employees. Labor experts say this is proof the job market is strengthening and showing signs of improvement. This theory is further evidenced by the fact that in November, the unemployment rate dropped to a two-and-a-half year low of 8.6 percent. First-time applications for state unemployment benefits are also near three and-a-half year lows.
December’s increase compared to November’s revised count of 70,000 by payroll company Intuit. The revision of November’s small business payrolls suggests the government’s non-farm employment count from that money could be increased from 120,000. According to a survey by Reuters, December non-farm payrolls are expected to increase 150,000, with the unemployment rate inching up to 8.7 percent.
According to Intuit, workers at small companies also saw more money in their paychecks last month.
The Conference Board’s monthly “Consumer Confidence Survey” found household perceptions of the labor market also appear to be improving. Measures of jobs defined as “plentiful” and “hard to get” produced their best readings since January of 2009.
The government is revising the previous months’ non-farm payrolls figures to be higher. Analysts say the model laid out by the Bureau of Labor Statistics tends to delay the small business employment count.
The survey by Intuit is based on responses from close to 72,000 small businesses (with less than 20 workers that use the Intuit Online Payroll system). The time period being analyzed is from November 24 to December 23.
Further data shows the average work week for small business workers increased .4 percent to 25.4 hours and the average monthly salary rose .4 percent to $2,706.
Labor experts note there is some volatility regarding seasonal employment, hours worked and pay over the past four months (as compared with earlier in 2011). The volatility reportedly indicates the recovery underway is still weak.
Modern Business Associates is an HR company that focuses on payroll and HR outsourcing. We routinely work with clients on small business payrolls and hiring trends. As a Professional Payroll and HR outsource organization, our clients rely on us to help them effectively deal with these kinds of topics.