Small Businesses Hit Hardest by Superstorm Sandy While Overall Job Growth Rises
Job growth fared better than expected in November, underscoring the idea that the economy’s fundamentals are improving—albeit at a moderate pace.
Total non-farm payroll employment rose by 146,000 in November, and the unemployment rate edged down to 7.7 percent, the U.S. Bureau of Labor Statistics reported today. Employment rose in retail trade, professional and business services, and health care, the Labor Department said.
Since the beginning of this year, employment growth has averaged 151,000 per month, about the same as the average monthly job gain of 153,000 in 2011.
The latest data continues to bode well for the idea that the U.S. economy is making a persistent and moderate recovery. "The fundamentals are improving," says Mekael Teshome, an economist at PNC Bank. "The wrongs that got us into the recession are being corrected."
Economics had expected the November report might be more skewed by the effects of Superstorm Sandy, which caused significant business interruption and damage in several parts of the country in late October and early November. But the Labor Department said it "did not substantively impact" the November figures.
Related: Small-Business Hiring, Sentiment Drops in November
The Labor Department does not break out the data by business size. But other recently released reports suggest small businesses more acutely felt Sandy’s pinch. Indeed, thousands of small businesses have turned to the U.S. Small Business Administration (SBA) for help. The SBA said today that they have approved $156.56 million in disaster loans to 2,507 residents and businesses to date.
Employment in private small business (companies with one to 49 employees) payrolls rose by 19,000 in November on a seasonally adjusted basis, according to the ADP Small Business Report released Wednesday.
Mark Zandi, chief economist of Moody's Analytics, estimates that if Sandy had not happened, small business payrolls would have been roughly in line with the October figure of an adjusted 52,000 jobs.
Another report, SurePayroll’s Small Business Scorecard, released late last week, shows a similar trend in hiring. Data from that report shows that month over-month-hiring for small businesses was down 0.1 percent in November and the average paycheck was flat.
While there are signs of economic improvement, small businesses remain cautious in terms of hiring, amid uncertainties over the Federal government’s ability to avoid the fiscal cliff and the tax ramifications of going over it.
Related: Inside What Small-Business Owners Had to Say to Obama About the Fiscal Cliff
Entrepreneurs have seen improvements to their local economies, but they’re still hesitant based on the national picture. “They’re not quite sure what’s around the corner,” says Teshome of PNC.