Small businesses experienced strong job growth during December 2021, according to the latest ADP Small Business jobs report.
During December small businesses (fewer than 50 employees) saw an increase of 204,000 jobs. The previous month, the small business job increase was 115,000 jobs.
Service-providing jobs were the bulk of the small business growth at 185,000. Businesses of 1-19 employees saw an increase of 96,000 jobs while those with 20-29 grew by 89,000 jobs.
Goods-producing jobs for small businesses grew by 19,000 (8,000 very small and 11,000 small).
Franchise jobs increased by 39,400, compared to 35,300 the previous month.
Small Businesses Add 204,000 Jobs
ADP chief economist Nela Richardson pointed out that December’s strong growth occurred as the impact from the Delta variant lessened and Omicron poised on the horizon.
“December’s job market strengthened as the fallout from the Delta variant faded and Omicron’s impact had yet to be seen,” Richardson said. “Job gains were broad-based, as goods producers added the strongest reading of the year, while service providers dominated growth.”
Overall, job growth was 807,000 jobs in December, up from an increase of 505,000 jobs during November.
“December’s job growth brought the fourth quarter average to 625,000, surpassing the 514,000 (jobs) average for the year,” Richardson said. “While job gains eclipsed 6 million in 2021, private sector payrolls are still nearly 4 million jobs short of pre-COVID-19 levels”
In her “Main Street” business blog post last week, Richardson predicted trends in interest rates and jobs.
Rates of Interest
“Federal governors decided to start gradually shutting off the free money pouring into the economy since the pandemic started. They also said that interest rates were probably going up in 2019. We don’t yet know when the Fed will begin raising interest rates, how high they’ll rise, or whether Main Street will suffer due to more expensive borrowing (think: small business loans, credit cards, and mortgages).
Employment and Job Trends
There has never been a greater need for workers. Record levels of job opportunities have been reached. On the surface, there appear to be more job openings than job seekers. With demand surging once more, the question “Where are the jobs?” has been replaced by “Where are the workers?” And when are they due to return?
Barriers that are “Structural” for both employees and employers
“Incorporating equity into pay has long-term effects. In addition, we also understand that infrastructure support, like easily accessible daycare, can empower job seekers. This factor is crucial to the equity equation. Employers will have to choose in 2022 whether to put social infrastructure and pay equity first for their employees.