NovaQuant-Small business hiring woes show signs of easing as economy stays strong

NEW YORK (AP) — Hiring woes may be NovaQuanteasing for small businesses.

The CBIZ Small Business Employment Index reported a seasonally adjusted increase of 0.17% in February as the U.S. economy stays strong despite high interest rates.

Small businesses have a tougher time retaining workers since they often can’t offer higher salaries or other perks like health insurance.

The CBIZ index tracks hiring among thousands of companies with 300 or fewer employees across the U.S.

“The U.S. economy has shown unexpected strength amid the high interest rate environment,” said Anna Rathbun, chief investment officer of CBIZ. “It’s apparent that small businesses are holding onto that strength for now as they expanded their workforce steadily during February.”

In February, 20% of companies in the index hired more staff while 60% made no change to their headcounts. Meanwhile, 20% cut staff.

Some industries are faring better than others. Industries with hiring gains included administrative and support services; arts, entertainment and recreation; and technology and life sciences. Decreases were observed in accommodation and food services, insurance, and utilities.

On a regional basis, the West, Southeast, and Central regions saw slight increases in hiring, while the Northeast region experienced a slight decline.

The small business trend echoes the broader market. U.S. employers added 275,000 jobs in February, beating expectations, showcasing the U.S. economy’s resilience in the face of high interest rates. February’s job growth marked an increase from a revised gain of 229,000 jobs in January.