Hiring Plans for US Small Businesses Fall to Lowest Since 2020

Hiring Plans for US Small Businesses Fall to Lowest Since 2020

(Bloomberg) — The share of US small-business owners who plan to add workers in coming months slipped in March to the lowest since May 2020, suggesting both some hiring success but also a softening in labor demand.

Some 15% of firms said they plan to create jobs in the next three months, down two percentage points from February, according to data out Thursday from the National Federation of Independent Business. A net 43% reported vacancies they could not fill, down from 47% in the prior month.

The report said, however, that small-business owners have reported some hiring success in the last four months. More firms reported increased employment rather than reductions.

The figures suggest tightness in the labor market is gradually easing and will help restrain wage pressures that have contributed to higher inflation. A net 42% reported raising compensation, down from 46% in February. Just over a fifth said they plan to increase wages in the next three months, matching the smallest share since 2021.

The full report, which will include data on small-business optimism and credit conditions, will be released April 11.

©2023 Bloomberg LP

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