Small-Business Hiring Plans Evaporate: Gallup
While the overall unemployment rate in the U.S. is edging down, worrying signs in small-business hiring suggest a bumpy road ahead.Small-business owners' net hiring intentions for the next 12 months plunged to -4 in November, from +10 in July, and owners expect to add fewer net new jobs in the next 12 months than at any time since the depths of the 2008-2009 recession, according to the November Wells Fargo/Gallup Small-Business Index survey. One in five owners also expects to reduce the number of jobs at their companies over the next 12 months, suggesting small-business owners are pessimistic about their operating environment as 2012 comes to a close. The report warned of the potential for a serious decline in jobs early next year if small-business owners' hiring intentions do not improve. In addition to asking about future hiring intentions, the survey also asked small-business owners to report on hiring over the past 12 months. In November, more small-business owners reported decreasing the number of employees (26 percent) than increasing (14 percent) them, resulting in a net hiring score of -12.That figure is down from -7 in July and -9 in the prior three quarterly measurements. Net hiring over the past 12 months is about where it was in July 2011, at -11. "This lack of improvement in small-business owners' self-reported hiring helps explain why too few new jobs have been created during much of 2012 to significantly lower the U.S. unemployment rate," the report noted.
Worryingly, small-business owners' self-reported hiring suggests deteriorating job growth over the past year, but not nearly as severe a decline as is implied by owners' hiring expectations for the next 12 months. The 14 percent of small-business owners who in November reported increasing their company hiring over the past 12 months is unchanged from July. However, the 26 percent reporting a decrease in the number of jobs at their businesses in the past 12 months is up from 21 percent in July, and is the highest level since November 2010.