The latest monthly jobs report from the National Federation of Independent Business (NFIB) sheds light on a slowdown in employment activity for small businesses in March. This is evident from a seasonally adjusted net 11% of small business owners planning to create new jobs in the next three months, which is down one point from February and the lowest level since May 2020.
Despite the slowdown in job openings, the small-business labor market remains tight, with owners competing to retain and recruit employees. In fact, 37% of all small business owners reported job openings they could not fill, which is the lowest reading since January 2021.
According to NFIB Chief Economist Bill Dunkelberg, job openings on Main Street are now back to pre-pandemic levels. However, he notes that there has been an increase in the percentage of small business owners reporting labor quality as their top operating problem, rising two points from February to 18%. Despite this, labor costs have decreased slightly, with only 10% of business owners reporting it as their most important problem.
On the compensation front, a net 38% of small business owners reported raising compensation, which is up three points from February. Looking ahead, a net 21% plan to raise compensation in the next three months, reflecting a two-point increase from February’s data.
The NFIB report also highlights some interesting trends regarding job openings by sector. For instance, 31% of small business owners have job openings for skilled workers while 14% have openings for unskilled labor. Job openings in construction have decreased significantly with almost half of construction companies unable to fill available positions. Meanwhile, sectors like transportation, construction and services have the highest job openings while finance and wholesale sectors have the lowest number of job openings.
In conclusion, although there has been a slight decrease in job creation plans among small businesses in March compared to February
