Small Business Hiring Snapshot
- New Hires: 46,000 vs. 30,000 [Oct]
- Monthly Average: 43,000
Small business hiring has slowed from 2017, when ADP said companies added an average 61,000 each month. Economists say hiring is being curtailed by companies' inability to find qualified candidates to fill their open positions. And many owners have said in surveys they won't hire until their revenue justifies the added expense and risk of taking on new staffers.
The lower-than-expected number is because of one of the tightest labor markets in a decade and a record number of unfilled positions, according to Moody’s chief economist Mark Zandi.
"Job growth is strong, but has likely peaked,” he said in a statement. “This month's report is free of significant weather effects and suggests slowing underlying job creation. With very tight labor markets and record unfilled positions, businesses will have an increasingly tough time adding to payrolls."
The service-providing sector added the most jobs, with the creation of 163,000 positions. It was followed by 59,000 jobs in the professional and business sector, and 49,000 in the education and health sector. Earlier this week, Wage growth picked up across America and the job market continued to strengthen, despite hiring constraints as employers struggle to find qualified workers, according to the Federal Reserve’s Beige Book.
Owners may also be more cautious because the tight labor market is forcing them to pay more to attract new staffers. And while the economy remains strong, many companies are facing higher prices due to rising interest rates and the Trump administration's trade tariffs and other countries' retaliatory tariffs.
In October, the U.S. payroll increase remained unchanged at a blowout number of 227,000 nonfarm jobs -- the highest level since February.
On Friday, the Labor Department will release its highly anticipated November jobs report, which will offer an in-depth look at the labor market, including job additions, the unemployment rate, the labor participation rate and wage growth. Analysts expect the U.S. economy will likely add 200,000 jobs, according to economists surveyed by Refinitiv.
The Associated Press contributed to this report.