Small Business Hiring Bolsters Jobs Momentum

Private-sector job growth and productivity roared to life in November and October, with a spike in small-business hiring leading to the fastest employment gains in the private sector since 2007.

Private employers added 93,000 jobs in November, and the number for October was revised upward to 83,000. Economists had expected a gain of 63,000 jobs in November, according to numbers released this morning by ADP Employer Services.

An Intuit survey released Tuesday showed small businesses played a part in the job gains. Small business employment grew by 0.24 percent in November, not a huge number, granted, but a sign that the outlook for small businesses is improving.

"The recovery that began late last summer for small businesses is still under way," said Susan Woodward, the economist who worked with Intuit to create its index, in a release. "While employment at the national level for all businesses is barely rising, small businesses are showing a more robust increase. This is in line with what we've seen with past recessions—small businesses are the first to hire when recovery begins."

Added to the encouraging job-growth reports, productivity is also on the rise. Employee output per hour in the third quarter rose at a 2.3 percent annual rate. That’s good news, because as employers reach the limit of what they can expect from employees, they begin to hire.

“In the third quarter, companies were still trying to squeeze whatever they could out of their workforce, but it’s pretty evident the current labor levels are about as tight as they come,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, told Bloomberg. “We’re beginning to see better momentum in the economy.”

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