The CBIZ Small Business Employment Index reported a hiring downturn for the second consecutive month as business transition to late-year hiring trends

The CBIZ Small Business Employment Index (“SBEI”) reported a seasonally adjusted decrease of 0.20% in September. The reading showed a decrease in hiring for the second straight month, as small businesses adjust hiring levels for the fall and winter months. 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 general labor market conditions are pointing to some weaknesses,” said Anna Rathbun, CFA, Chief Investment Officer, CBIZ Retirement & Investment Solutions. “Based on the Federal Reserve's recent communication, additional rate hikes, and a continuation of tight financial conditions are likely to continue to impact small businesses.”

The Bureau of Labor Statistics’ September reading showed an overall increase of 263,000 private-sector jobs. Despite the overall hiring growth, the national unemployment rate returned to its July level with only a minor decrease to 3.5%. The report is inclusive of all non-farm private employers across businesses of all sizes. The ADP employment report indicated collective hiring growth among small, medium-sized and large companies. Its September reading showed an overall increase of 208,000 private-sector jobs for the month.

On a regional level, the CBIZ SBEI data showed an overall hiring decrease in every region of the United States, except for the West (0.99%). The Northeast (-1.02%) reported the largest hiring decline, while the Southeast (-0.03%) and Central (-0.19%) regions showed a flat reading.

On an industry level, the most notable hiring increases were seen in Transportation, Management, Technology and Life Sciences, and Utilities. Arts, Entertainment and Recreation, Professional Services, Government, and Rental and Leasing Services all experienced declines in hiring.

Rathbun added: “In these current economic conditions, companies may begin looking at their staffing levels, particularly in the retail and service-oriented sectors which normally see the hardest impacts of decreased consumer activity.”

To view an infographic with data from the employment index, visit the CBIZ website.

Additional takeaways from the September SBEI include:

September’s snapshot: 22% of companies in the index increased staffing, 54% made no change to their headcounts and 24% reduced employment totals.

Industries at a glance: Transportation, Management, Technology and Life Sciences, and Utilities saw hiring gains. Decreases were seen in Arts, Entertainment and Recreation, Professional Services, Government, and Rental and Leasing Services.

Geographical hiring: The West (0.99%) experienced an increase in hiring, while the Northeast (-1.02%), Southeast (-0.03%) and the Central (-0.19%) regions all experienced hiring declines.

What’s next? As we head into cooler months, September usually sees shedding of summer jobs which is reflected in this month's reading. Small businesses will have to continue to show resilience as the Federal Reserve aims to tame inflation with higher rates in the fall and winter months.

Editor’s note:

(1) The SBEI illustration 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. is a leading provider of financial, insurance and advisory services to businesses throughout the United States. Financial services include accounting, tax, government health care consulting, transaction advisory, risk advisory, and valuation services. Insurance services include employee benefits consulting, retirement plan 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 accounting and insurance brokerage providers in the U.S. For more information, visit www.cbiz.com.

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