Hiring among employers with 300 or fewer employees dropped by 2.37 percent after a 0.39 percent gain in December, according to the CBIZ Small Business Employment Index.
Although the unemployment rate slightly rose from 7.8 percent to 7.9 percent, an ADP January jobs survey shows that the private sector brought in 192,000 jobs, far surpassing analysts' projection of 165,000 jobs. This figure also tops December's revised tally of 185,000 added jobs.
"This month's SBEI prints with a decline of 2.37 percent, which is the lowest seasonal reduction in work force in the past two years of January reports," says Philip Noftsinger, business unit president for CBIZ Payroll Services.
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The survey also finds that 21 percent of respondents hired employees, and 31 percent of respondents cut employees. The remaining 48 percent of respondents did not change their work force numbers. While employment dropped, it is the smallest seasonal decline in the past two years, which could be a sign of an improving labor market.
Moving forward, CBIZ is keeping close watch on whether hiring will continue to gradually grow this winter and in the long term. Regardless of last month's debt ceiling crisis, the economy remained resilient, CBIZ maintains.
"The CBIZ SBEI is not adjusted for seasonality, allowing the user to compare historical results year over year to interpret the raw data to extrapolate what's occurring in the small business labor market," Noftsinger says.
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