Small businesses boosted private-sector hiring in September, adding the most jobs of all employers in the month amid the slowest pace of hiring in more than two years, the ADP employment report showed Wednesday.
Private companies filled nearly 90,000 jobs last month. Businesses with up to 49 employees topped the list, hiring 95,000 people. Midsized outfits with 50 to 499 employees added 72,000 workers. Companies with more than 500 employees dragged down total hiring as they shed 83,000 jobs in September.
The leisure and hospitality industry added the most jobs, followed by financial activities and construction. Professional and business services shed the most jobs in September, ADP pointed out.
It was the slowest pace of hiring since January 2021, when private employers shed jobs, ADP said. Also, although wages increased by nearly 6 percent, their growth rate declined for the 12th time in a row.
"We are seeing a steepening decline in jobs this month," Nela Richardson, chief economist at ADP, said in a statement. "Additionally, we are seeing a steady decline in wages in the past 12 months."
The decline in hiring and cooling of wage growth comes at a time when the Federal Reserve has hiked rates to two-decade highs at a range of 5.25 percent to 5.5 percent in an effort to slow historic rise in prices. Fed Chairman Jerome Powell said last month that policymakers were hoping for a soft landing for the economy. The expectation is that even as policymakers raise interest rates to lower inflation to the 2 percent target, there won't be too much damage to jobs and the economy.
As small businesses added jobs, company owners expected revenue to grow over the next 12 months, according to a survey by Bank of America released on Wednesday.
The survey shows small businesses are still worried about the economy. The number of small businesses expecting the economy to improve fell to 34 percent, down 10 percent from last year, with inflation and the political environment of concern. But some negative trends from last year have improved, particularly supply chain issues and hiring.
But the survey also revealed that minority business owners were optimistic about their prospects.
Over the next year, for example, more than half of Black business owners plan to hire more workers, a jump from 44 percent last year.
Read more: Financing for Small Businesses
"While facing multiple obstacles and challenges over the past year, today's entrepreneurs continue to persevere and move forward with their growth and expansion plans," Sharon Miller, president of small business, head of specialty banking and lending at Bank of America, said in a statement.
"Despite a changing business landscape, women and minority small business owners continue to forge their own pathways to success while remaining pillars in their local economies."
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Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
About the writer
Omar Mohammed is a Newsweek reporter based in the Greater Boston area. His focus is reporting on the Economy and ... Read more
