There are a host of reasons why small business employment numbers should have been anemic in July. But, they weren’t. As a matter of fact, small business kept overall job growth from moving into the red.
The ADP National Employment Report showed non-farm employment rose by only 9,000 jobs. That is one of the worst showings in several years.
Large businesses, those with over 500 employees, lost 32,000 jobs. Middle sized businesses, those with between 50 and 499 employees lost 9,000 people.
Small businesses, those with less that 50 people, added 50,000 jobs.
The odds against small business pulling all of the load were considerable. In theory, high energy costs and tight credit should be shutting down the ability of companies of modest size to stay open, let alone expand.
Without any direct help from the Fed or the banking system, small businesses must, in many cases, be financing whatever success they have out of their own operating cash flow.
As the economy moves toward the Fall, the open question is whether small business can continue to buck the overall trend. The answer to that is, without some support for credit and commodities price relief, the answer is probably no.
Douglas A. McIntyre
