According to the latest edition of Intuit Inc.’s Small Business Revenue and Employment Indexes, there has been an ongoing decline in small business employment for companies with less than 20 employees since May.
The October Employment Index show that small business employment decreased by 0.05 percent, at an annualized decline of 0.6 percent, equating to approximately 10,000 fewer jobs than in September. Based on October’s numbers and the latest national employment data from the Bureau of Labor Statistics, Intuit revised downward the previously reported September employment rate to a decline of 0.06 percent, also a monthly decrease of approximately 10,000 jobs.
“The employment and revenue indexes have long been the only source of near real-time employment and revenue data for the smallest of small businesses,” said Susan Woodward, the economist who worked with Intuit to create the indexes. “Now that Intuit has added new data inputs to its methodology and more than doubled its anonymized sample size of payroll customers from approximately 80,000 to 170,000, we’re in an even better place to report on the growth of U.S. small businesses.”
The October decrease in employment continues a decline that started in May. From March 2010 to May 2012, small business employment grew by 150,000 jobs, totaling 19.9 million. Since May, small business employment has fallen by 65,000 jobs, bringing the total recovery to 85,000 small business jobs.
“The absence of a strong rise in small business employment during the recovery reflects two forces,” said Woodward. “First, while construction shows some recovery, residential construction activity remains far below where it was in 2006. Second, small business employment has been a declining share of private sector employment for at least 60 years. The decline tends to be abrupt in recessions and slower the rest of the time. The jobs lost are primarily non-manual routine work, such as word processing and checkout services in retail. These jobs are also lost in larger firms, but small businesses start with more of these jobs and thus lose more.”
See index.intuit.com for an in-depth look into the October's employment index.