WASHINGTON While the federal government’s relatively upbeat employment report for November is fueling optimism among restaurateurs and other businesses that the economy might be turning the corner, another study states that job loss continues to be a problem for small business owners.
Even more, small business owners have told the National Federation of Independent Business that job cuts will continue in the next three months, with the main culprit being reduced sales and profit margins that will not support job growth.
“The largest impediment to new hiring is weak sales,” said NFIB’s chief economist William C. Dunkelberg. “Since January 2008, more owners have reported lower sales — quarter over quarter — in every month, mostly by double-digit margins.
“The consumer is the key to job creation,” he said. “When businesses have more customers, they will hire more workers.”
According to the National Federation of Independent Business’ latest survey, released last week, small businesses reported a November decrease in average employment per firm of 0.58 workers during the prior three months. That result is about even with October’s average loss of 0.52 workers, and less than May’s average deficit of 1.26 workers per firm. All NFIB figures are seasonally adjusted.
In November, nine percent of small business owners said they hiked employment by an average of 2.3 workers per firm, and 21 percent said they reduced employment by an average of 4.2 workers, the NFIB reported.
“The job generating machine is still in reverse as November’s report represents the 22nd consecutive month with more small business owners reporting employment declines than employment increases,” Dunkelberg said. “Sales are not picking up, so survival requires continuous attention to costs — and labor costs loom large.”
Dunkelberg added that 8 percent of owners surveyed reported unfilled job openings, which remains unchanged from August. Seventeen percent said that over the next three months they plan to reduce employment, which is up 1 percent, while 7 percent said they expect to create new jobs, down 2 percent.
The federal government, however, painted a rosier employment picture. The U.S. Labor Department said that the economy lost 11,000 jobs in November, pushing the unemployment rate to 10 percent, down from 10.2 percent in October. That represents the fewest jobs cut by employers of any month since the start of the recession in 2007.
Contact Paul Frumkin at [email protected].
