Small business hiring fell by more than half in August, the likely result of a shrinking labor pool.
Payroll processor ADP said Thursday that its small business customers added 21,000 new jobs last month, down from 59,000 in July. That's also less than half the monthly average of nearly 49,000 during the first seven months of this year. ADP bases its reports on payroll data from its customers with one to 49 employees.
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Small business hiring has slowed from 2017, when monthly job gains averaged 61,000. The falling unemployment rate has made it harder for many companies to find qualified workers to fill their open positions.
The slower gains at small companies depressed hiring at ADP customers of all sizes. The company counted 163,000 new jobs overall, down from 217,000 in July, with hiring most strong at companies with 50 to 499 employees.
Periodic surveys of small businesses by banks and industry groups show demand for workers has increased, but many companies also say they're not planning to hire. Among the reasons they cite: They have enough employees to get their work done now, and they don't want to hire unless they already have revenue growth that justifies the added costs and risks of taking on more staffers.
More insight about hiring will come Friday, when the Labor Department issues its report on August employment. However, the government does not break down job gains by company size.
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