May 20, 2024 12:17 am
Hiring troubles for small businesses improve as economy remains robust

Despite the high interest rates, the U.S. economy continues to show strength and small businesses are starting to expand their workforces, according to the CBIZ Small Business Employment Index which reported a seasonally adjusted increase of 0.17% in February. The index monitors hiring trends among thousands of companies with 300 or fewer employees throughout the United States and indicates that hiring challenges may be easing for small businesses.

Small businesses often struggle to retain employees due to their inability to provide higher wages or additional benefits like health insurance. However, this trend is changing as more companies are starting to invest in their workforce, despite the high interest rates.

According to CBIZ’s Chief Investment Officer Anna Rathbun, the U.S. economy has displayed unexpected resilience in the face of high interest rates. This has allowed small businesses to gradually expand their workforces throughout February, with approximately 20% of companies in the index increasing their staff, while 60% maintained the same headcounts. Meanwhile, 20% reduced their staff numbers.

Certain industries are performing more favorably than others, with sectors such as administrative and support services, arts, entertainment, recreation, and technology and life sciences showing hiring growth while industries like accommodation and food services, insurance, and utilities experienced declines.

Regionally, the West region saw a slight increase in hiring while the Northeast region faced a slight decrease in hiring trends among small businesses. This mirrors broader market trends as U.S employers added 275,000 jobs in February – surpassing expectations and demonstrating the endurance of the economy despite high interest rates. This marks an increase from the 229,000 jobs gained in January of the same year.[

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