Small Businesses Steadily Creating Jobs
Slowly but surely, small companies of 20 or fewer workers are adding jobs and putting the Great Recession in the rear-view mirror.
The data from Intuit Payroll’s Small Business Indexes is considered a preview of the highly anticipated U.S. Department of Labor’s official job numbers, which are set to be released Friday.
The indexes are based on online employment data from some 80,000 U.S. small businesses—each employs fewer than 20 people—that use Intuit’s online payroll software. According to the Bureau of Labor Statistics, firms of this size comprise 87 percent of U.S. private employment.
Hot Spots and Low PointsMichigan showed the most job growth: 0.8 percent. Nearly all states experienced some increase, except for Massachusetts, New York, Oregon and Pennsylvia, which showed slight dips.
Revenue declined for the sixth consecutive month, this time by 0.4 percent. As was the case in July, the retail industry and the lodging industry suffered the biggest declines: 0.7 percent. Construction also took a hit, declining by 0.6 percent. The health care and social assistance had the smallest dip in revenue of all the industries: 0.3 percent (just slightly less than the previous month's 0.4 percent).
Bigger Paychecks, Longer HoursThe report from Mountain View, Calif.–based Intuit showed monthly compensation rose 0.6 percent to $2,768 in September, up $17 from August. Average monthly hours worked rose 0.18 percent (12 minutes) to 107.2.
"This month's indexes bring both good and bad news," Susan Woodward, the economist who worked with Intuit to create the indexes, said in a statement. The bad news is that revenue is dropping, but she pointed out that self-employment numbers are up.
"After five years of declining self-employment beginning in January 2007, we began seeing a big comeback starting in November 2011," she said.
Self-Employment on the RiseIn the second quarter of 2012, the number of self-employed workers was nearly 9.9 million, up seven percent from the first quarter.??
One theory: The dip in revenue per business “may reflect the entry of these new businesses into the economy," she said.
Small businesses have created 800,000 jobs since October 2009, according to Intuit. Economists marked June 2009 as the end of the recession.
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photo: Spencer Platt / Getty Images